On Thursday, January 18, 2018, California Democratic Assemblymen Kevin McCarty of Sacramento and Phil Ting of San Francisco announced due to Republicans cutting the corporate tax rate from 35 to 21 percent, or a 14 percent decrease, that it only seemed reasonable to raise the corporate tax rate in California because these corporations, according to McCarty, can now afford to give some of the money back to Californians who need the help.
According to the Sacramento Bee:
The proposal from McCarty and Ting creates a new tax for businesses in California, which already has a state corporate tax rate of 8.84 percent. Companies with annual net income of more than $1 million in California would pay an additional surcharge of 7 percent, or half their savings from the recent federal tax cut.
So California based corporations like Apple will be hit with a 7 percent state tax increase. This announcement comes on the heels of Apple’s announcement that over the next five years they will contribute over $350 billion to the US economy and create thousands of jobs. They will also repatriate billions of dollars to invest in the US due to the new tax plan.
So if logic serves me well, it seems that Apple wanting to invest in places like California where it is based and presumably hire thousands of Californians with high-wage jobs is a good thing because it would expand the tax base and remove people for social services.
Unfortunately, these assemblymen think they know how best to spend Apple’s money than Apple, which is one of the world’s largest and most profitable corporations.
So when Apple issues a press release on the 17th of January, stating that due to the tax cut, they are accelerating their investment and job creation in the US, in turn, these assemblymen come out the following day with a proposed tax increase on Apple.
And people wonder why I’m running to be California’s next chief financial officer and State Controller and how I ever came up with the idea of Trickle-up-Taxation; a plan that strips power and most taxing authority away from the hands of Sacramento politicians and brings those decisions closer to home.
The policies coming out of Sacramento are not just void of any semblance or modicum of a basic understanding of economics. What is coming out of Sacramento is Marxism.
Marxism in Action
That is correct; you heard me right, what these Assemblymen are proposing is Marxism.
They understand that these corporations (bourgeoisie) are the engine that currently creates wealth, but through their legislative actions, they criticize these corporations, even if they are progressively run corporations like Apple, as morally bankrupt because even Apple ignores and alienates workers/customers (proletariat).
Remember, to the progressive Marxist, corporations are inherently evil, even when progressives run them (e.g., Apple) because it is the nature of capitalism to exploit the worker. Thus, only government is truly good and can bring harmony and equality to society.
Therefore, it is up to them (the government/ruling class) to take corporation’s (bourgeoisie) wealth (e.g., high corporate tax rates) and redistribute it (e.g., social services) to the common people (proletariat).
These assemblymen will not come out and state they are Marxist, and they might not even think they are but have no doubt, these assemblymen and the policies coming out of the California Democratic Party are rooted in Marxist ideology and economic theory.
New Tax Plan – New Reality
California has been shielded from its bad economic policies because California is one of the most desirable places to live in the world and before this new tax plan, it was shielded from higher federal taxes.
That is right, before this new tax plan, California could get away with higher taxes because they knew that if they taxed you more, it just meant you would be taxed less federally. You’re paying those tax dollars regardless. You’re not keeping that as extra money. You’re either paying it to Sacramento or D.C.
So now with a limit on state and local tax deductions (SALT), you better change your Marxist ways Sacramento, or you’ll start seeing companies like Apple and those millionaires and billionaires that California depends on might just be packing up and moving out of state.
Your attempt to create an artificial 100 percent SALT deduction as proposed by State Senate Majority Leader Kevin de León, to protect these millionaires and billionaires from higher taxes will not work.
The new tax plan was a game changer and the cop-out that we’re the sixth largest economy in the world, and somehow we are too big to fail (e.g., Soviet Union, Venezuela), won’t pass muster.
We need a new direction, and new leadership in Sacramento and I hope to help lead the way as California’s next CFO and State Controller.