The Democratic lawmakers in California have proposed a bill that would force businesses and other companies to fork over more than $1 million to fund state welfare and social support programs. Because the federal tax cut has made things easier for businesses, California wants to take away that tax benefit and put the money the companies are saving toward programs that support low-income and middle-class families.
The Democrats behind the proposed piece of legislation include assembly members Kevin McCarty of Sacramento and Phil Ting of San Francisco. These lawmakers have pushed forward the proposed Assembly Constitutional Amendment that would put a tax surcharge on California companies to help the average people who were negatively affected by the GOP’s sweeping tax reform bill.
States like California will be hurt by the GOP tax bill. Because the state relies heavily on taxation to fund its state-sponsored welfare and social justice programs, California needed to figure out an alternative way to get their programs funded. This tax surcharge on businesses was a solution the Democrats found to be effective.
“Trump’s tax reform plan was nothing more than a middle-class tax increase,” Ting said in a statement. “It is unconscionable to force working families to pay the price for tax breaks and loopholes benefiting corporations and wealthy individuals. This bill will help blunt the impact of the federal tax plan on everyday Californians by protecting funding for education, affordable health care, and other core priorities.”
The Democratic piece of legislation is by no means ready to go into law. It needs two-thirds of the California Legislation vote. But the Democrats are at an advantage. They have recently lost their supermajority, as Fox News reported. This will make it harder for the Democrats to push through this tax surcharge that will be tough on business and beneficial to low-income and middle-class residents of California.
If the bill does pass the California Legislature, then Governor Jerry Brown will need to sign it. Even then it is not ready to be put into effect. The people of the state will need to vote it into law. But the bill is expected to be popular among the masses as it will benefit most people who are not high-income.
The GOP tax bill caps the amount of state income taxes and local property tax write-offs. That means average people cannot claim as much on their taxes, and thus, must pay more come April 15. The new law caps the benefit at just $10,000. The average such write-off in California was $22,000 in 2016. This will hurt the state because they won’t be receiving as many funds from the people who live there.
State Senate President Pro Tem Kevin de Leon discovered a way around the GOP bill. He introduced legislation that would allow Californians to voluntarily donating to a charitable fund to the state. This will enable people to claim more than $10,000 and will act as a donor write-off come tax time.
What do you think about California’s push to tax businesses in lieu of the new legislation?