The assault on California’s already beleaguered economy continued this week with yet another proposal to levy steep new taxes that threaten to drive away business and investment, diminish the state’s competitiveness and put a drag on California’s ability to recover the almost 5 million jobs lost to the COVID-19 shutdown. The latest salvo comes in the form of AB 2088 (Bonta), which proposes taxing assets held by California residents both in the state and around the globe. It follows another bill (AB 1253, Santiago) that would boost the state’s already nation-leading personal income tax rates. The Council has joined with the California Chamber of Commerce, California Taxpayers Association and many other groups in vehemently opposing AB 1253.
These misguided bills come on top of numerous other local proposals the Council is fighting to increase taxes on California’s economic engine at a time when it is sputtering for air. In cities like San Francisco and Richmond, ballot proposals have emerged to impose new and increased taxes on everything from CEO income to jobs themselves. In an interview with the San Francisco Business Times, former Wells Fargo CEO Dick Kovacevich this week offered sobering and unvarnished comments on how dangerous these new taxes are:
“This state could implode within a generation. It has a trillion dollars of unfunded retirement and healthcare benefits. It has the worst reputation for business. It has the highest taxes. The highest regulations — and they’re adding more on,” Kovacevich said. “It’s going to implode if they don’t make changes in the business climate that affects small business even more than big business.”
The Council remains vigilant in monitoring these proposals and is preparing to escalate our actions to defeat them in Sacramento and at the ballot box. Council CEO Jim Wunderman has offered the very practical solution of putting forward a state economic recovery bond to help California maintain education programs and crucial services through the next couple of years as we recover from the pandemic – without raising taxes that will undermine that recovery.
