Whitman Proposes Cuts to Spending, Taxes for California

Targeted tax cuts and reducing state spending will be at the forefront of Republican gubernatorial candidate Meg Whitman's platform if she receives the party's nomination.

"We have to put people back to work, so I want to do that by cutting taxes and streamlining regulation," Whitman, former eBay CEO, told CNBC Thursday. "But probably more important about the financial issues is we have to get after spending."

Her first step in cutting spending? Cutting state jobs, she said.

California's government workforce has ballooned by 40,000 employees in the last five years, Whitman said. "The cold hard truth is we have a government we can no longer afford. We have to reduce that work force," said Whitman.

Government programs must also go under the knife, with the welfare program being at the top of the list. California currently has 12 percent of the nation's population but 32 percent of the welfare cases, Whitman said.

She said she would also reduce state spending by using technology to reduce fraud.

It's estimated Medicare and Medicaid generate about $4.8 to $5.2 billion worth of fraud every year in California, a figure that could be reduced if the state was using technology to catch abuses of the system.

"I come from Silicon Valley, a 130 miles south of Sacramento, but it might as well be a million miles away in terms of how the state has used technology to find fraud, to do things more efficiently," said Whitman.

Whitman also would cut current company taxes that will help increase employment by keeping jobs in the state.

One tax she proposed cutting was the factory tax, which requires businesses to pay a sales tax on equipment they purchase to manufacture. It is estimated this tax has resulted in a loss of 600,000 manufacturing jobs since 2000, or 32 percent of the industrial base in California , she said.

"If we eliminate the factory tax, that will help stop the bleeding of manufacturing jobs, overseas as well as to other states," said Whitman.