Shame on you, California businesses. In our infinite wisdom, we, the Democrats in this state that was once “Golden,” have determined that, with the cut in your federal taxes, YOU HAVE TOO MUCH MONEY!
Accordingly, you will hand over half of that tax cut so that we may distribute it fairly. Because…income inequality and all that crap.
God forbid you would do something productive with all that cash like create jobs or give raises to your workers, which would create more wealth and more opportunity. You haven’t asked permission to do that anyway and besides, we all know that you just want to buy fancier jewelry for your wife and purchase that yacht you’ve had your eye on.
So hand it over, capitalist pig. Oh, and by the way, you have a real nice business going there. It’d be a shame if anything happened to it.
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.”
Note the Chronicle’s characterization of companies being able to keep more of their profits as a “windfall” — something undeserved.
And by codifying the legality of the state’s arbitrary seizure of property in a constitutional amendment, California will join other socialist paradises where the state tells you how much of your wealth you can keep rather than you telling the state how much they can take. Democrats nationwide hold to the former principle, which is the antithesis of representative democracy.
Mr. Ting’s statement that the tax cuts were a “middle class tax increase” is absurd. He is referring to the capping of deductions for state taxes at $10,000. Who in the middle class pays $10,000 in state taxes?
Almost 90% of the SALT benefit goes to taxpayers with income higher than $100,000, according to the Tax Foundation.
Less than a third of taxpayers itemize deductions to begin with. Of those who do, nearly all of them take the SALT deduction.
High-income and high-tax states benefit the most from the deduction. Together, California and New York receive around one-third of the total value of the deduction, the Tax Foundation found. Filers in California, New York, New Jersey, Illinois, Texas, and Pennsylvania claim more than half of the value of the deduction.
The SALT deduction is usually the main reason for itemizing. More than 95% of itemizers claimed the deduction in 2014, while 28% of all taxpayers claimed it, reports the Tax Foundation.
The increase in taxes for upper middle class taxpayers will be more than offset by reductions in their tax rate. Democrats are simply lying when they claim they are fighting for the “middle class.”
For many businesses, this constitutional amendment may be the last straw. If it passes, I suspect moving companies will be doing land office business.