If I understand what he's saying:
If an out-of-state online retailer has advertising affiliates in California, they have to pay California sales taxes on every purchase made by a customer in California.
Ken Rockwell's Web site is an advertising affiliate of several large online retailers based in other states.
So, if the law passes, the online retailers likely would drop KR as an affiliate to avoid paying those sales taxes. KR would lose lots of income. And California would lose the income taxes KR pays on that income.
So, if I am interpreting this correctly, then it doesn't look like a good move for California.
DISCLAIMER: I don't live in California, I'm not a tax lawyer nor do I play one on television. I don't even know what tax lawyers look like, or what you feed them if one turns up scratching at the back door. I apologize if I got this wrong.