Anticipating the effects of the new federal tax overhaul, California democrats have a plan. Raising taxes on businesses.
The argument centers around the notion that businesses stand to benefit greatly from the new federal tax structure. Businesses stand to save a considerable amount of money thanks to lowered corporate tax rates.
California democrats argue that businesses should be taxed higher, and the legislation seeks to do just that. Under the plan, a tax surcharge on businesses making over $1 million would go to the state of California.
What’s Going on In California?
California has suffered from its fair share of financial hardship. Already, California has one of the highest costs of living in the country. High home prices and high taxes already plague the state which is seeing lower income residents flee.
It is argued that the legislation would help allocate additional funds towards social services and government programs. However, despite spending nearly $1 trillion on state social welfare programs over the last 25 years, the poverty rate in California is the worst in the nation with 1 in 5 residents being classified as “poor.”
In fact, in California, earning $84,450 per year is enough for a California family of four to qualify as “low-income” earners. Additionally, earning a quarter million dollars per year may qualify you for subsidized housing.
California currently accounts for 1/3 of all welfare recipients in the country. Towns are routinely short on cash, and some residents have even taken to exploring alternative living situations to cope with the cost of living.
The answer for California democrats is more taxes. The bill would have to pass through the state legislature. This is an uphill battle as democrats have lost their super-majority in the state.
Time will tell what will happen, but California’s taxes might be going up. Again.
Ready to Leave California?
If high taxes and high costs of living have got you questioning the west coast life, consider a change.
City vs City is a cost of living calculator that allows users to compare their current costs with those in another city. With our app, California residents can compare their zip code with another and see where they can get the most bang for their buck.