Taxes on Productive Equipment

By Tom Campbell

After 2003, California became one of the very few states that taxes machines employers purchase to make products. Forty-four other states exempt manufacturing equipment from their sales or property taxes, 20 others explicitly exempt research equipment. In 2014, this tax was partially repealed. The state should repeal this tax in its entirety. California should apply its tax to final products, not the machines that are used to manufacture those products, or businesses will locate in other states that don't tax the means of making goods. This will also result in higher employee productivity in California, which should increase employee wages. The data from the 2014 changes show that this change will gain revenue for the state, not lose it.

The above are statements on several public policy issues drafted by Tom Campbell, former US Congressman, former California State Senator, former Director of Finance for California, and currently Interim Chairman of the Common Sense Party. They are meant to initiate consideration of several important issues; they are not the official views of the Common Sense Party. Please feel free to submit your own thoughts on these issues on the Open Policy Discussion Page.