On March 18, MP Evan Low (D-Campbell) amended his Bill 65 to create a Universal Basic Income (UBI) program funded by an Income Tax (PIT) increase. The bill would add Section 17044 and Chapter 2.5 (starting with Section 17065) to Part 10 of Division 2 of the Revenue and Taxation Code. As a tax increase, the bill would require a 2/3 vote from both chambers of the legislature.
Section 1 of the bill would add section 17044 of the Revenue and Taxation Code, which would impose an additional 1% tax on that portion of a taxpayer’s income greater than $ 2 million from January 1, 2022. The following exception to this tax increase includes: Granting tax credits and joint tax returns.
In Section 2 of the Bill, Chapter 2.5, entitled California Universal Basic Income, would be added. It would create the Universal Basic Income Fund in the Treasury, which would be administered by the Franchise Tax Board (FTB). The money collected from the millionaire tax would be deposited in this new UBI fund.
In addition, the FTB would administer California’s UBI program, where each eligible recipient would receive a universal basic income of $ 1,000 per month. An “Eligible Recipient” would be defined as a person who meets all of the following requirements:
- Is a resident and has been a resident for the last three consecutive tax years.
- Is at least 18 years old.
- Is not currently detained in a county or state prison.
- Reported gross income that does not exceed 200 percent of the average income per capita for the eligible recipient’s current district of residence, as determined by the United States Census Bureau.
In the bill, “universal basic income” would be defined as an unconditional cash payment of the same amount, which is issued monthly to individual authorized recipients in order to guarantee the economic security of the recipients. In addition, the AG would prescribe all the regulations required for this program. The FTB would be prohibited from using payments to offset the liabilities of an authorized recipient. The controller would be prohibited from clearing overdue accounts with UBI payments.
The bill is expected to be negotiated in its first political committee in April.