Two California lawmakers want companies who are bringing back billions from overseas as a result of the GOP tax cuts to pay billions more in taxes.
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.
“It is unconscionable to force working families to pay the price for tax breaks and loopholes benefiting corporations and wealthy individuals,” Ting said in a statement, according to The San Francisco Chronicle. “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 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.
About 2 million workers have received a bonus after the bill’s passage.
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.”