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Comment by wooster | Hacker News Reader

The big one that likely upset him (and which he more specifically calls out in a previous piece) was the elimination of the qualified small business exclusion:

  Not only did the state's Franchise Tax Board (FTB)
  eliminate a tax break on capital gains for small 
  business owners and investors, it announced the tax 
  would be reinstated retroactively. This means those 
  who benefitted from the break can expect a bill for 
  unpaid taxes, plus interest, stretching all the way 
  back to 2008.

http://tech.fortune.cnn.com/2013/02/21/the-california-tax-th...

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That was an extremely rare tax deduction that few had every even heard of before an article about it came out in January.

It was struck down by courts as unconstitutional, so the deduction had to be disqualified retroactively.

The whole retroactive thing strikes me as incredibly wrong and should be illegal.

Scary! Which part of my net money belongs to me? Do we have to tt money to the caiman AFTER paying taxes now?

>The whole retroactive thing strikes me as incredibly wrong and should be illegal.

if you want to make duly passed state laws like this illegal, you would need to take a time machine back to May of 1787 and try to add "no ex post facto law shall be passed" to the constitution.

if you do can I come with you just to see the look on your face?

I guess my joke didn't come across. The Constitution already has the words "no ex post facto law shall be passed" in it (my joke is that all that work going back to try to add it would be wasted) right after the words that congress can't just declare someone guilty of a crime without a trial. Just Google "no ex post facto shall be passed."

Constitutionality of law indicates otherwise.

the tax law was found to be invalid by a court, so all taxes paid under the law had to revert to the rate paid under the previous law. However, only taxes paid in the last four years are subject to court rulings like this due to statutes of limitation, which is why the CFTB went back four years, and not zero (everyone paying after the law was found to be invalid would have a 14th amendment suit since the law is invalid), three (see previous) or five (statute of limitations).

Okay, thanks for the info!

> the tax law was found to be invalid by a court

This isn't quite true, only part of the law was found to be unconstitutional (the part requiring that 80% of your payroll be located in CA). The FTB could have chose to continue the law but would have to retroactively pay people who previously applied for this deduction and were refused because they had >20% payroll outside of CA.

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