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On Thursday, September 8, state assemblyman and San Diego mayoral hopeful Nathan Fletcher joined fellow GOP assemblyman Cameron Smyth in announcing a deal struck with governor Jerry Brown concerning the collection of corporate taxes.

“By closing a corporate loophole that only benefits out-of-state corporations, we’re providing real and permanent tax relief to Californians,” said Fletcher. “This measure is much needed and will do a lot to get people working again.”

Under the deal, companies doing business in the state would calculate their corporate taxes on the share of sales actually conducted in California. This would raise about $1 billion a year from out-of-state companies, which would fund tax breaks for businesses as well as individuals. Private citizens would receive increases in the standard deduction in the amount of $1000 for individuals or $2000 for couples.

Fletcher was asked during his announcement whether the proposed change constitutes a tax increase, something Republicans have almost universally pledged to reject. The law removes an option companies currently have to calculate their taxes in two different ways, choosing whichever method results in the lowest tax bill.

“If the net effect is revenue neutral, then in my eyes that’s tax reform. If it encourages job creation here and rewards Californians, then that’s a really good thing,” Fletcher responded to the tax-hike allegation.

With the votes of Fletcher and Smyth, a sufficient majority is in place to pass the law without any further Republican support, so long as all 52 Democrats in the Assembly sign on.

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