Supporters of a measure to force corporation to pay million of dollars in taxes when they relocate offshore failed to win the necessary two-thirds majority in the state Senate last Wednesday.
The bill was sponsored by State Treasurer Phil Angelides, who has been a regular supporter of such proposals. Last year he called on the California Public Employees' Retirement system (Calpers), the biggest US public pension fund, and its sister fund the California State Teachers' Retirement System (Calstrs), to ban investment firms who move offshore, arguing that they do so for the sole purpose of avoiding taxes and weakening shareholder rights.
The bill’s author, Sen. Jackie Speier, (D-Daly City), observed: "This is a gross loophole used by a very small number of companies." She added: "If a small number of companies are doing it today, a larger number of companies will do it tomorrow."
According to the state's Franchise Tax Board, California could forgo up to $132 million in corporate taxes over the next ten years from firms ‘expatriating’ offshore.
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