They’re Baaack! Higher Corporate Tax Rates on California Companies?
Just when hundreds of thousands of Californians have begun to enjoy their bonuses and raises thanks to the new tax law, the progressives in Sacramento are working on ways to crush workers’ newfound prosperity. Just last week, Democratic Assemblymen Kevin McCarty of Sacramento and Phil Ting of San Francisco introduced a constitutional amendment that would raise corporate taxes an additional 7 percent for California businesses that have net incomes of more than $1 million.
California already has a worldwide reputation for being bad for business. In ALEC’s annual report Rich States, Poor States produced by Arthur Laffer, Steve Moore, and Jonathan Williams, here’s where California stands:
- 40th in top marginal corporate income tax rate,
- 48th in minimum wage,
- 50th in average workers’ compensation costs,
- 49th in net out-migration, and
- 47th in overall economic outlook.
If Assemblymen McCarty and Ting get their way, the exodus of businesses and people out of California will make the current outmigration (repeat: 49th) look like a trickle.
And where are these tax dollars going? Proponents estimate the $15 billion to $17 billion would go to education, college affordability initiatives, child care, and expanding the California’s Earned Income Tax Credit. This, despite a more than $6 billion government surplus this fiscal year.
“I’ve seen enough billionaire justice in the first 11 months of this presidency to last my lifetime,” Assemblyman McCarty said in a statement. “At a time when reckless federal tax policy favors billionaires over middle-class workers, ACA 22 will help ensure that California can continue to grow and support middle-class families throughout the state.”
Indeed, progressives can never face the fact that the best way to support middle class families is not with government largess, but though plenty of good high-paying jobs that will help families afford child care, a college education, and a comfortable home.
The private sector – the real backbone of the middle class
Thanks to our colleagues at the Americans for Tax Reform who have compiled a list of more than 200 companies that have recently announced salary increases, bonuses, or 401(k) match increases due to tax reform. I took that list and narrowed it down to the businesses that are based in California or have significant operations in the state. Hats off to the businesses who are truly benefitting California’s workers.
Alaska Airlines: $1,000 bonuses American Airlines: $1,000 bonuses (excluding officers)
Apple: $2,500 bonuses in the form of restricted stock; $30 billion in capital expenditures over 5 years; 20,000 new employees will be hired; increase support of coding education and science, technology, engineering, arts, and math, increased support for U.S. manufacturing.
AT&T: $1,000 bonuses; $1 billion increase in capital expenditures
Bank of America: $1,000 bonuses
Boeing: $100 million in charitable donations: $100 million for workforce development; $100 million for infrastructure and facilities
Capital One: raising the base wage to $15 per hour
Comcast: $1,000 bonuses; $50 billion investment in infrastructure in the next five years
Comerica Bank: $1,000 bonuses; base wage increase to $15 per hour
Fiat Chrysler: $2,000 bonuses
Humana: base wage increase to $15 per hour; acceleration of annual performance-based incentive program; additional community investments
JetBlue: 1,000 bonuses
Jim Rinehart State Farm agent (Seaside, CA): pay raises for three employees
Jordan Winery (Sonoma, CA): $1,000 bonuses for 85 employees
Kramerica Properties (Merced, CA): $2,000 bonuses for 6 employees
Sinclair Broadcast Group: $1,000 bonuses
Southwest Airlines: $1,000 bonuses; $5 million in additional charitable donations
Summit State Bank: $2,000 bonuses for non-executive employees
The Travelers Companies: $1,000 bonuses; base wage raised to $15 per hour
U.S. Bancorp: $1,000 bonuses; base wage to $15 per hour
Visa: significantly increased permanent contributions to employee 401(k) accounts
Walmart: Base wage increase for all hourly employees to $11; bonuses of up to $1,000; expanded maternity leave and parental leave; $5,000 for adoption expenses
Waste Management: $2,000 bonuses