California is in the news for proposing a tax on lower taxes.
Assemblymen Kevin McCarty and Phil Ting, both Democrats, of Sacramento and San Francisco (both Northern California) have proposed an Assembly Constitutional Amendment (ACA) that would impose a surcharge on lower taxes.
- The bill is ACA 22. They titled it the Middle Class Fiscal Relief Act.
- Despite this title, the bill is written to allow the income to be raided for “loans for cash flow purposes” to “state funds or accounts,” with no limits on the type of accounts.
- The surcharge is on corporate taxes only. It wouldn’t apply to personal income taxes.
- Only on companies earning more than $1 Million (although that’s not very large for a company.)
- The California Corporate tax is already an eye-watering 8+%; this would effectively add another 7% to it.
This has no chance of becoming law. It’s a (California) Constitutional Amendment, and so requires a 2/3 (super-majority) vote in the California Legislature, plus the Governor’s signature, plus a majority vote by the citizens.
So yes, two California legislators are trying to tax a tax cut, but since they presumably knew they wouldn’t be able to get it passed, it’s mostly just a publicity-stunt-gone-wrong.