Corporate Tax

The proposed improve in California company tax would assist the homeless

SAN FRANCISCO – A California coalition proposes legislation to raise taxes for wealthy multinational corporations and raise more than $ 2 billion annually to shelter tens of thousands of the homeless.

Proponents say Assembly Bill 71 would reinvent California’s approach to solving homelessness – for the first time ever, an ongoing, sufficient source of government funding to get people off the streets. Opponents say it adds to the perception that California is anti-business.

“Our state is facing an unprecedented homeless crisis that is on the verge of disaster due to the economic impact of COVID-19,” Los Angeles Democratic MP Luz Rivas said on Wednesday, noting that one in four Americans is homeless in California .

The state suffers from prohibitively high housing costs and wages that cannot keep up, leading to a widening gap between rich and poor. The coronavirus pandemic has highlighted the difficulty of staying at home for people who have no home. Officials took some people affected by homelessness to shelters, hotel rooms or socially remote tents, although many are still sleeping outside.

The bill’s chances are unknown, though Democrats, who are more likely to approve taxes on corporations, control both houses of the legislature.

At the same time, Governor Gavin Newsom opposed higher taxes for the rich when he released his budget last week, saying these taxes were “not part of the conversation”. This is despite the fact that the Democratic governor dedicated his address for the state to homelessness last year and used the pandemic to secure thousands of hotel rooms that he hopes will lead to additional housing for an estimated 150,000 people.

This isn’t the first time homeless people and housing attorneys have turned to those with deep pockets for money. In 2018, San Francisco voters approved a controversial tax on over-abundant businesses that fund homeless programs. The measure shared tech titans in the city.

Bill 71 would increase corporate tax from 8.84% to 9.6% for companies that generate profits of more than $ 5 million annually in California, said Christopher Martin, Housing California political director who supports the law. Proponents say the move would raise an estimated $ 2.4 billion a year.

Corporations pay a lower percentage of income taxes than they did 30 years ago, according to a May report by the California Budget and Policy Center. The bill would bring the tax rate back up to 1980, Martin said.

Several tech companies and executives have left California in the past few months, including Tesla CEO Elon Musk and Hewlett Packard Enterprise, feeding those who complain that California is unfriendly to business. However, Martin said the proposed tax hike would have no impact on where a company is headquartered or where its CEO lives, as it will tax profits made in California.

Still, the California Taxpayers Association said lawmakers should focus on helping residents recover from the pandemic rather than getting a multi-billion dollar tax hike that only adds to the state’s reputation as anti-business.

“We believe that just by proposing such a large tax, proponents will negatively affect the state’s ability to compete with other states,” said spokesman David Kline. He said anything that hinders economic recovery will harm California.

The Mayors of Oakland and Los Angeles said at a news conference that more than $ 2 billion in earmarked funds would be made available for more housing, permanent housing and social workers each year. They say they need to ask Sacramento for money every session to alleviate an issue that has long been considered a problem for cities and counties.

“This is a man-made problem that man can solve. I’m sure of it, ”said Eric Garcetti, Mayor of Los Angeles. “These things can lead us to a day where we look back and say, ‘People don’t attract, I don’t live on the streets anymore. How did we ever live like this? ‘”

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