Calif. Dems Propose Amendment to Seize Half of Businesses’ Tax Reform Savings

Calif. Dems Propose Amendment to Seize Half of Businesses’ Tax Reform Savings


By Craig Bannister |
January 19, 2018 |


https://www.cnsnews.com/s3/files/sty...?itok=S3FlT1DVAssemblyman Kevin McCarty (D-Sacramento) wants half of businesses' tax cuts. (Screenshot)

Democrats in California have proposed an amendment to take half of the tax savings businesses in their state get from the recently-passed federal tax cuts.

California would seize the savings via a proposed "tax surcharge" on any tax reform benefits, The San Francisco Chronicle reports:

"A proposed Assembly Constitutional Amendment by Assemblymen Kevin McCarty, D-Sacramento, and Phil Ting, D-San Francisco, would create a tax surcharge on California companies making more than $1 million so that half of their federal tax cut would instead go to programs that benefit low-income and middle-class families."

If successful, the plan will ensure that Silicon Valley companies will join the "hundreds of thousands" of taxpayers who have fled California due to its high taxes, Americans for Tax Reform (ATR) President Grover Norquist told CNSNews.com in reaction to the Democrats' proposal:

"Having hiked income and property taxes to the point that hundreds of thousands of California Taxpayers have fled to lower tax states, the political 'leaders' of California are now looking to hike state business tax rates to ensure that Silicon valley—in order to stay international competitive—moves bit by bit across state lines."

Passing the amendment became tougher when Democrats lost their supermajority following resignations of three Assembly Democrats – two plagued by sexual misconduct allegations and one citing health reasons, The Chronicle reports:

"As a constitutional amendment, the bill would require approval from two-thirds of the Legislature to pass, a difficult hurdle now that Democrats have lost their supermajority. If passed and signed by Gov. Jerry Brown, it would then go to voters for final approval."

https://www.cnsnews.com/blog/craig-b...reform-savings

California Democrats want businesses to give half their tax-cut savings to state

By Melody Gutierrez
Updated 5:12 am, Sunday, January 21, 2018


SACRAMENTO — California lawmakers are targeting the expected windfall that companies in the state would see under the federal tax overhaul with a bill that would require businesses to turn over half to the state.

A proposed Assembly Constitutional Amendment by Assemblymen Kevin McCarty, D-Sacramento, and Phil Ting, D-San Francisco, would create a tax surcharge on California companies making more than $1 million so that half of their federal tax cut would instead go to programs that benefit low-income and middle-class families.

“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.”

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As a constitutional amendment, the bill would require approval from two-thirds of the Legislature to pass, a difficult hurdle now that Democrats have lost their supermajority. If passed and signed by Gov. Jerry Brown, it would then go to voters for final approval.

Democrats lost their supermajority following resignations of two Assembly Democrats, Matt Dababneh of Encino (Los Angeles County), and Raul Bocanegra of San Fernando Valley (Los Angeles County) amid sexual misconduct allegations. Another Assembly Democrat, Sebastian Ridley-Thomas of Los Angeles, resigned citing health issues. In the Senate, Democrat Tony Mendoza of Artesia (Los Angeles County) is taking a leave of absence pending an investigation into sexual misconduct allegations.

California Democrats have been exploring ways to help those in the state who could end up paying higher federal taxes next year under the Republican tax overhaul.
The GOP overhaul caps state income taxes and local property tax write-offs on the federal income tax return at $10,000, a move expected to hurt high-local-tax states such as California, where the average state and local tax write-off in 2016 was $22,000.

State Senate President Pro Tem Kevin de León introduced legislation this month that would allow Californians to get around the state and local tax cap with a voluntary donation to a charitable fund created by the state of any amount of owed taxes above $10,000. That donation — in lieu of taxes — would allow donors to write off the gifts on their federal tax returns.

http://www.sfgate.com/bayarea/articl...m-85307-tbla-5