It is expected that an initial $10 billion public offering of stock (IPO) from Palo Alto-based Facebook will occur in the next few months -- and the possibility of the state reaping "hundreds of millions of dollars in capital gains taxes from Facebook investors and employees profiting from stock sales...could bring a much-needed windfall to [the]...$9.2 billion [state] deficit," according to a report by Judy Lin in today's Sacramento Bee.
Quoting from a report released yesterday by Legislative Analyst Mac Taylor, who was commenting on Governor Brown's '12-'13 budget proposal, the Bee published:
Taylor cautioned that the performance of the overall stock market could play a larger role than any single initial public offering, no matter how successful, depending on whether the market has an unusually strong or weak year.
"We caution that it will be impossible to forecast IPO-related state revenues with any precision, and it is likely that little information about the state revenue gain from the Facebook IPO will be available before investors file tax returns in April 2013," the report stated in a section titled "The Facebook Effect."
The Brown administration did not calculate higher revenue based on the assumption that Facebook will go public, said Brown's finance spokesman, H.D. Palmer. But the Democratic governor is counting on a prosperous year for the wealthiest California residents, estimating $56 billion in personal income taxes for the fiscal year that starts July 1. [Taklor] has a lower projection, estimating the state will raise $53.1 billion from personal income taxes in that same time period.
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