The California Chamber of Commerce today announced the addition of SB 220, (Senate Committee on Budget and Fiscal Review) as amended May 25, 2023, to its 2023 Job Killer list.
SB 220 would punish successful California businesses with higher taxes by raising the tax rate of companies that shoulder the vast majority of corporate tax liability from 8.84% to 10.99%—amounting to a 24% higher tax bill. SB 220 is being referred to as a tax break for California businesses, but that’s simply not the case. The bill would decrease the corporate tax rate to 6.63% for employers making up to $1.5 million in taxable income and these taxpayers as a group pay just 12% of all corporate income taxes in California. Taxpayers who bear the vast majority of corporate income tax liability will see their tax bill increase.
“SB 220 unnecessarily risks damaging California’s economy at a time when the state needs businesses to grow,” said CalChamber Policy Advocate Preston Young. “Such a policy would hurt our state’s employers, employees and consumers by increasing the price of goods and services sold in California and forcing California-based companies to consider reducing in-state costs. The bill will depress business growth and employee wages in California and amplify the state’s budgetary issues.”
In a letter sent to members of the Senate Committee on Budget and Fiscal Review today, Young states that, “Higher taxes influence a plethora of business decisions, such as where a business will locate, how many employees they will hire and what wages they can offer. For companies that are located or would otherwise expand in California, the higher taxes from doing business in the California market will force them to seek to reduce costs elsewhere, including their presence in the state. SB 220 would degrade California’s economic competitiveness against other states who notoriously compete to attract California’s companies with a friendlier and less costly investment climate. This bill would take the exact opposite approach and unnecessarily raise the cost of doing business in California.”
About CalChamber
The California Chamber of Commerce (CalChamber) is the largest broad-based business advocate to government in California. Membership represents one-quarter of the private sector jobs in California and includes firms of all sizes and companies from every industry within the state. Leveraging our front-line knowledge of laws and regulations, we provide products and services to help businesses comply with both federal and state law. CalChamber, a not-for-profit organization with roots dating to 1890, promotes international trade and investment in order to stimulate California’s economy and create jobs. Please visit our website at www.calchamber.com.
