The Senate floor at the state Capitol in Sacramento on Jan. 4, 2023. Photo by Rahul Lal, CalMatters
In summary
As Republicans stymie President Joe Biden’s budget proposal to reverse Trump-era tax cuts and increase the corporate tax rate, Senate Democrats in California want to follow through at the state level to help close the budget deficit and keep various spending programs intact. They also proposed a 25% cut for smaller businesses and additional relief for low-income renters and families.
Guest Commentary written by
Nancy Skinner
Democratic state Sen. Nancy Skinner of Oakland is the chair of the Senate Budget Committee.
President Joe Biden is right. The massive tax cuts under the Trump administration turned out to be nothing more than a giant giveaway to the world’s largest corporations.
Mega corporations like FedEx, Nike, General Motors, Ford, Chevron and dozens of others have paid nothing or almost nothing in federal taxes, while raking in billions of dollars.
Biden has proposed to partially reverse the Trump tax cuts, which slashed the federal corporate tax rate in 2017 by 40%, from 35% to 21%. Under Biden’s plan, the corporate rate would increase modestly to 28%.
The president’s plan is smart, prudent and responsible, and would help balance our federal budget. That plan, however, is being stalled by the Republicans who control Congress, so the Trump tax cuts appear here to stay.
But that doesn’t mean the fight for fairness is over. California has the opportunity to follow the president’s lead and recover some of Trump’s tax giveaway. The California Senate’s Protect Our Progress budget plan would do exactly that, while also helping small businesses – the backbone of our economy who’ve been buffeted by inflation – and maintaining funding for our schools, homelessness programs, climate protection, child care and more.
A generation ago, big corporations paid a higher tax rate in California and shouldered a fairer share of our state’s tax burden than they do now. In the early 1980s, corporations that reported profits in our state paid 9.6% of their income in state taxes. But during the Republican-led gubernatorial eras of George Deukmejian and Pete Wilson, the state corporate tax rate was lowered twice to 8.84% – where it still stands today – for all businesses, big and small.
Learn more about legislators mentioned in this story
Sen. Nancy Skinner has taken at least
$1.8 million
from the Labor
sector since she was elected to the legislature. That represents
26%
of her total campaign contributions.
Under the Senate budget plan, California would recoup some of the Trump tax giveaways by increasing the tax rate on the very largest corporations. The new rate of 10.99% would apply to just about 2,500 corporations, located all over the U.S., that report taxable income of more than $1.5 million from the business they do in California. The tax rate would impact the nation’s biggest companies, regardless of where they’re headquartered, from WalMart and Amazon to Coca-Cola and Chevron.
Smaller companies that do business in California – the other 99.8% or roughly 1 million businesses – would get a 25% tax cut. Most of those are small businesses that have seen rising costs and could use some help right now. In addition, our Senate plan would provide $1.9 billion in tax relief for renters and low-income families, who also deserve much needed relief from inflation.
In all, our proposed higher tax rate on mega corporations would generate about $6 billion a year in revenue for California. And it would help us avoid budget cuts that we would otherwise face this year, from housing to transportation, broadband, and climate and green energy investments.
This is why we’ve dubbed our budget plan, “Protect Our Progress.” It protects the transformative progress California has made in the past several years to create a more equitable economy for all.
And it does so by requiring big corporations to pay their fair share and by heeding President Biden’s call to recoup some of the huge corporate handouts of the Trump era.
California faces a $31.5 billion budget deficit in 2023-24. Senate Republicans are urging Democrats to be cautious about spending decisions and to ditch a proposal to increase taxes on major corporations.
With the projected budget deficit ballooning, Republicans in the California Senate are urging Democrats to be cautious about spending decisions and back off on a proposal to increase taxes on major corporations.
Senate Democrats: Mega corporations that conduct business in California should pay their fair share
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In summary
As Republicans stymie President Joe Biden’s budget proposal to reverse Trump-era tax cuts and increase the corporate tax rate, Senate Democrats in California want to follow through at the state level to help close the budget deficit and keep various spending programs intact. They also proposed a 25% cut for smaller businesses and additional relief for low-income renters and families.
Guest Commentary written by
Nancy Skinner
Democratic state Sen. Nancy Skinner of Oakland is the chair of the Senate Budget Committee.
President Joe Biden is right. The massive tax cuts under the Trump administration turned out to be nothing more than a giant giveaway to the world’s largest corporations.
Mega corporations like FedEx, Nike, General Motors, Ford, Chevron and dozens of others have paid nothing or almost nothing in federal taxes, while raking in billions of dollars.
At the same time, the Trump tax handouts have worsened our national debt and harmed our economy. In all, the cuts cost our nation roughly $2.3 trillion and deepened the federal deficit by $2 trillion.
Biden has proposed to partially reverse the Trump tax cuts, which slashed the federal corporate tax rate in 2017 by 40%, from 35% to 21%. Under Biden’s plan, the corporate rate would increase modestly to 28%.
The president’s plan is smart, prudent and responsible, and would help balance our federal budget. That plan, however, is being stalled by the Republicans who control Congress, so the Trump tax cuts appear here to stay.
But that doesn’t mean the fight for fairness is over. California has the opportunity to follow the president’s lead and recover some of Trump’s tax giveaway. The California Senate’s Protect Our Progress budget plan would do exactly that, while also helping small businesses – the backbone of our economy who’ve been buffeted by inflation – and maintaining funding for our schools, homelessness programs, climate protection, child care and more.
A generation ago, big corporations paid a higher tax rate in California and shouldered a fairer share of our state’s tax burden than they do now. In the early 1980s, corporations that reported profits in our state paid 9.6% of their income in state taxes. But during the Republican-led gubernatorial eras of George Deukmejian and Pete Wilson, the state corporate tax rate was lowered twice to 8.84% – where it still stands today – for all businesses, big and small.
Learn more about legislators mentioned in this story
Nancy Skinner
State Senate, District 9 (Oakland)
Nancy Skinner
State Senate, District 9 (Oakland)
Time in office
2016—present
Background
University Educator
Contact
Email Legislator
Voter Registration
Sen. Nancy Skinner has taken at least $1.8 million from the Labor sector since she was elected to the legislature. That represents 26% of her total campaign contributions.
Under the Senate budget plan, California would recoup some of the Trump tax giveaways by increasing the tax rate on the very largest corporations. The new rate of 10.99% would apply to just about 2,500 corporations, located all over the U.S., that report taxable income of more than $1.5 million from the business they do in California. The tax rate would impact the nation’s biggest companies, regardless of where they’re headquartered, from WalMart and Amazon to Coca-Cola and Chevron.
Smaller companies that do business in California – the other 99.8% or roughly 1 million businesses – would get a 25% tax cut. Most of those are small businesses that have seen rising costs and could use some help right now. In addition, our Senate plan would provide $1.9 billion in tax relief for renters and low-income families, who also deserve much needed relief from inflation.
In all, our proposed higher tax rate on mega corporations would generate about $6 billion a year in revenue for California. And it would help us avoid budget cuts that we would otherwise face this year, from housing to transportation, broadband, and climate and green energy investments.
This is why we’ve dubbed our budget plan, “Protect Our Progress.” It protects the transformative progress California has made in the past several years to create a more equitable economy for all.
And it does so by requiring big corporations to pay their fair share and by heeding President Biden’s call to recoup some of the huge corporate handouts of the Trump era.
California faces a $31.5 billion budget deficit in 2023-24. Senate Republicans are urging Democrats to be cautious about spending decisions and to ditch a proposal to increase taxes on major corporations.
more commentary on state budget priorities
Senate Republicans: Raising state taxes on corporations could chase businesses out of California
With the projected budget deficit ballooning, Republicans in the California Senate are urging Democrats to be cautious about spending decisions and back off on a proposal to increase taxes on major corporations.
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