Democrats in California have proposed an amendment to take half of the tax savings businesses in their state get from the recently-passed federal tax cuts.
California would seize the savings via a proposed "tax surcharge" on any tax reform benefits, The San Francisco Chronicle reports:
"A proposed Assembly Constitutional Amendment by Assemblymen Kevin McCarty, D-Sacramento, and Phil Ting, D-San Francisco, would create a tax surcharge on California companies making more than $1 million so that half of their federal tax cut would instead go to programs that benefit low-income and middle-class families."
If successful, the plan will ensure that Silicon Valley companies will join the "hundreds of thousands" of taxpayers who have fled California due to its high taxes, Americans for Tax Reform (ATR) President Grover Norquist told CNSNews.com in reaction to the Democrats' proposal:
"Having hiked income and property taxes to the point that hundreds of thousands of California Taxpayers have fled to lower tax states, the political 'leaders' of California are now looking to hike state business tax rates to ensure that Silicon valley—in order to stay international competitive—moves bit by bit across state lines."
Passing the amendment became tougher when Democrats lost their supermajority following resignations of three Assembly Democrats – two plagued by sexual misconduct allegations and one citing health reasons, The Chronicle reports:
"As a constitutional amendment, the bill would require approval from two-thirds of the Legislature to pass, a difficult hurdle now that Democrats have lost their supermajority. If passed and signed by Gov. Jerry Brown, it would then go to voters for final approval."