AB 1500, "Middle Class Scholarship Act" is a Fraud

By Jay L. Stern

AB1500 is a scheme to increase divisiveness between California's business and middle-class taxpayers. It masquerades as relief from high university tuition while placing a billion-dollar per-year burden on the backs of corporations whose registration is out of California. It is a perfect way to drive more business OUT of California.

This bill claims that it will close a "loophole" available to out-of-state corporations. It forces them to pay $1 Billion annually that either is paid to other states now, or is a new tax. I've read AB1500 several times and the language is so convoluted that it is not clear to me just WHAT it is saying. Of course, I'm just a dumb engineer, so what do I know, eh?

The thing is, these are not necessarily businesses that do not have holdings in California and merely sell goods or provide services here. If a business is incorporated in, let us say, Nevada, Delaware, or other states, but has a physical presence here, I think they will be subject to the tax. The Bill clearly specifies its targets: agriculture, financial businesses, "extractive" businesses --- even cable television.

The glitzy flyers distributed to the people to gather support for this train wreck show happy graduates and smiling parents. AB1500 is promoted as taking the $1 Billion per year revenue from this scheme and using it to defray the cost of UC or CSU education. Notice that the cost of the education remains as high as ever, but now someone else is paying up to $8,169 per student, per year!

The so-called "relief" applies only to families with income under $150,000 per year. But if new money is needed to fund this give-away, where do you think it comes from? If a corporation has its tax bill hiked, won't it just turn around and pass the added cost on to ITS customers? That means any Californian who eats, banks or watches cable TV will have their cost jacked-up to pay the $1 Billion supposedly captured by closing this "loophole." The poorest to the wealthiest of our residents will be paying to subsidize university students.

I'm an educator; I love the idea of a college education for those who can profit from it. I adore the idea of lower tuition! But notice that AB1500 does not LOWER the cost; it SUBSIDIZES it! Regardless of how the sponsors weasel-word this bill, it STILL amounts to NEW taxes with the state getting the revenue! How about doing something to lower costs for ALL students? Maybe we can reduce the number of administrators, for starters.

What I especially do not like is how AB1500 is being marketed as a boon to Middle Class families with college-age children! In another time, the sponsors of this bill would have been tarred and feathered, but I'd be content with not letting AB1500 ever be passed. Wouldn't hurt if those who push the hardest for this fraud are kicked out of office at the next election, either!