Even though California is enjoying its ninth straight year of economic growth and the state has a solid budget surplus and a brimming Rainy Day Fund, California legislators can’t seem to resist the temptation to raise taxes. This week on The Workplace, CalChamber President Allan Zaremberg and Loren Kaye, president of the California Foundation for Commerce and Education, highlight just a handful of the more than $15 billion in new taxes policymakers are considering. On the list of possible items lawmakers would like to tax is everything from medicine to tires and businesses.
One proposal alone, SB 37 (Skinner; D-Berkeley), contemplates one of the steepest corporate tax rates ever considered in California. The measure seeks to raise corporate taxes by $5 billion. Kaye highlights another proposal, SB 468 (Jackson), which dangerously attempts to do away with one of the most important corporate tax incentives in the state — the research and development (R&D) tax credit, which fuels development in technology, agriculture, and manufacturing, among other sectors of the economy.
Zaremberg sums up the episode by commenting on projections of another $13 billion in surplus revenues coming in from anticipated Initial Public Offerings further underscoring that there is no need to raise new revenue by adding more taxes.
“We have more revenue coming in, but there’s no shortage of people who want to raise the average person’s taxes,” Zaremberg says.