California Democrats want some businesses to fork over half tax-cut savings to state
FoxNews – Calling the Trump administration’s tax reform plan a “middle-class tax increase,” two California lawmakers introduced a bill that would force large companies to fork over half of their expected savings to the state.
Assemblymen Kevin McCarty and Phil Ting, both Democrats, introduced Assembly Constitutional Amendment 22, which calls for a 10 percent surcharge on companies with a net earnings over $1 million. The plan could potentially raise billions for the state’s social services programs.
The paper reported that the two lawmakers face an up-hill battle because Democrats in the state have lost their supermajority in the Legislature.
The Trump administration’s tax bill cut the corporate tax rate from 35 percent to 21 percent. The administration contends that the lessened tax burden will stimulate the economy and help the U.S. stay competitive on a global scale.
Congressional Democrats said the bill was rushed through and benefits the top 1 percent of earners. House Minority Leader Nancy Pelosi has diminished the corporate bonuses as mere “crumbs.”
An editorial last week in The Sacramento Bee called the McCarty-Ting proposal “dumb.”
“California’s tax system should be updated to match a 21st century economy,” the editorial read. “The high sales tax rate, which hits low-income people hardest, ought to be lowered, and certain services used by wealthier people and corporations ought to be subject to taxes. Proposition 13, the property tax cutting measure approved by voters 40 years ago, could be revisited.”
The editorial pointed out that the state will maintain a $13.5 billion reserve this year, but, “Bills that blindly seek to soak big business and the rich at a time of budget surplus solve nothing.”
The Associated Press contributed to this report.
Source: US Government Class
