BA10-Mod5Lect1 Notes - Module 5 Lecture 1 4/18 Global...

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Module 5 Lecture 1 4/18 Global Business & Entrepreneurship Guest Lecture: Dean Campbell on the Budget Deficit CA is the world’s 6 th largest economy Budget deficit of US is a bigger problem than CA Dean Campbell deals with employers and the high costs of doing business in CA If CA budget not in balance, employers are worried o When market goes down, afraid the state would spend the same and make up the difference from employers Real threats Chairman of Cisco is John Chambers Electronics & machinery company o No plans to build new plants in CA o No expansion here, given up manufacturing products in CA Competition with Other States How does state tax employer when it is spread over different states? Is income reported in every state? o CA has a 9% corporate tax, 6 other states left with nothing o Decide on a formula for dividing overall income o May be based on # employees in state/ total employees o May be based on # plants in state/ total plants CA has a relatively high tax compared to other states o Companies have incentive to go to less costly states o Employers say they emphasize sales , not employees Impose Regulation in one state versus another o Do cost-benefit analysis o Ex. Greenhouse gases, pesticide, requires regulation in CA o
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