OF ALL THE NERVE!

(via Brian Boys)Banks Move Billions to Shelter Income from Taxes (DowJones Business News, 8/7/2003)

..."We do not believe this is appropriate," California controller Steve Westly said of the funds. "This is something we need to fix." New York State tax authorities also are examining the issue. It's unclear how many other states might be affected.

Exactly how much the strategy has cost cash-strapped California, where many of the banks have their headquarters, is unclear. Revenue officials said a sampling of tax returns from just a handful of banks showed that the maneuver trimmed those institutions' levies by a total of $46 million in 2000.

A business moving money to protect it from taxes is not appropriate but a $38 Billion CA State budget deficit which grew 40% in just the last 4 years is? I'm not very good with numbers, but trimming the rate of spending growth by just 5% looks to be about 3 times as effective as trying to recapture lost revenue which may very well have been legally sheltered. Posted by John Resnick at August 7, 2003 12:55 PM