The profit target you speak of is a subjectively determined target. Andrew Carnegie was once asked, “How much is enough?”… He replied, “Just a little bit more”. If companies communicate to their shareholders that due to being taxed more (something out of their control), the profit target has to be lowered. What you have is a battle between the have and have nots… WHO will really be taxed? The consumers (through higher prices) and workers (through decreased health benefits, wages, or hours to work) or the shareholders (translating in less money for dividends). There’s no law stating a company must make $X in profits… and again, these taxes are levied on profits. I understand you trying to make as much money for investors as humanly possible, but who suffers more overall? Someone with a lower dividend (don’t think that will cause someone to lose their home) or someone with a lower paying job with decreased health benefits?

If taxes are raised on U.S. corporations, you can be sure every major CPA firm in the country will be working overtime to find ways to reduce the tax obligation under the new set of rules. Every major tax change has a subtitle to it – the CPA full employment act.

If we had lower, internationally competitive, corporate taxes, our corporations would not be working so hard to transfer profits overseas into more tax favorable jurisdictions. The U.S. would keep the few jobs that are impacted and the Treasury would collect more income taxes.

There is no single solution to CA’s complex problems, but change must start on a local level. We can help by encouraging our elected officials to spend our tax dollars wisely. I live in Los Angeles County, and I’m seeing some glimmers of hope with the county Board of Supervisors. Recently, they reissued an RFP for vendor services to operate the county’s GAIN case management services (a welfare-to-work program). I expect the same two companies will submit proposals as last year – incumbent Maximus Inc. and newcomer Policy Studies Inc. (PSI).

Maximus has maintained its contract with the county for many years now, but its cost to the taxpayers keeps skyrocketing. If the new bids resemble those from last year, we can expect that the Maximus bid will cost taxpayers almost a million dollars more than PSI’s. What’s more, Maximus has a track record of poor performance. Under its latest three year contract, Maximus has been cited repeatedly for failing to meet required goals in 5 of 8 categories (according to the LA Times). Last year, the Department of Public Social Services favored PSI based on scoring done on the two companies by a neutral third party. PSI scored 9,082 out of 9,616 possible points in the procurement process, whereas Maximus scored 7,824 of 9,616. PSI won by a 13% margin on technical score and also submitted the lowest bid, which was 6% cheaper.

Even worse, Maximus has spent hundreds of thousands of dollars trying to buy the support of the Board of Supervisors through lobbying and campaign donations.

I am grateful that the BOS reissued the RFP and am confident they will select the right choice for LA. In these tough economic times, we need our local elected officials to scrutinize how every tax dollar is being spent and eliminate waste wherever possible. California doesn’t have to continue its downward spiral.