Democrats in California are threatening to confiscate more earnings from businesses due to corporate tax cuts, leaving a free market analyst to wonder how far the left-wing state will go to destroy free enterprise.
Assemblymen Kevin McCarty (D-Sacramento) and Phil Ting (D-San Francisco) have introduced Assembly Constitution Amendment 22. It would require a 10 percent surcharge on companies with net earnings of over $1 million.
The legislation comes after the tax reform bill signed by President Donald Trump lowered the federal corporate tax from 35 to 21 percent.
"It is unconscionable to force working families to pay the price for tax breaks and loopholes benefiting corporations and wealthy individuals," Ting said in a statement to SFGate.com. "This bill will help blunt the impact of the federal tax plan on everyday Californians by protecting funding for education, affordable health care, and other core priorities."
Ian Adams, associate vice president of state affairs at the R Street Institute, predicts the bill won't get far because the legislation is a constitutional amendment that requires a two-thirds vote in both chambers.
"In spite of the fact that the Democrats have large majorities," he explains, "they're not quite super-majorities."
The state's Democratic Party is split among different caucuses, too, he says, which means it's doubtful all Democrats would get behind the legislation either.
Meanwhile, Adams says Amendment 22 is a perfect political platform for anyone concerned about the way California seems to make itself uncompetitive.
"This state has just the most amazing natural benefits, has incredible universities, has incredible talent," he observes. "And it seems that policy makers are just determined to do everything they can to undermine those natural advantages."
The corporate tax cuts are going to do great things for businesses across the country, he adds, but California is demonstrating how far it is willing to go in its ongoing feud with the Trump administration.