Just as California Governor Jerry Brown is fending off attacks from Texas Governor Rick Perry, who’s luring California companies to Texas, the Franchise Tax Board has dealt a serious blow to small-business investors. For two decades, California has offered a significant tax break on capital gains to people who make money by investing in companies that have less than $50 million in assets and keep at least 80 percent of their payroll and assets in the state. The break cuts the capital gains rate from 9 percent to 4.5 percent.
