California Is Raising Taxes For This?

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A certain style of architecture is known as “California Crazy”. It’s the donut shop that looks like a large concrete donut, or a restaurant that looks like a hat. This kind of programmatic architecture was the hallmark of Southern California’s middle century.

California Crazy has taken on a new meaning. It refers to the policies of a left-wing, progressive state. The taxes that citizens of the Golden State pay vary depending on their residency, income, and filing status.

These tax rates could rise even further.

The state legislature is considering a constitutional amendment that would increase taxes to an astonishing level in order to finance the first single-payer healthcare program in the United States.

The new taxes would be in three forms.
1. Surtaxes are atop the income tax structure for individuals, starting at $149 509;
2. An automatic, graduated-rate payroll tax system. The top rate kicks in for employees earning more than $49,000.
3. Gross receipts tax at 2.3 percent, not including the first $2,000,000 of business income.

This proposal has some notable catches.

First, companies with less than 50 employees are exempt from the payroll tax. The massive taxes start to hit at the 50th employee.

For example, imagine a company with 49 employees earning $80,000 per employee. The company’s payroll taxes are not burdened with 49 employees. One additional employee can result in a tax bill of $90,000–much more than the employee’s salary.

This discourages small business growth, it is obvious.

Even successful businesses with high-profit margins like grocery chains can be hurt by the corporate gross receipts tax. It’s also disastrous for businesses that are losing money.

Surtaxes are also a punishment for married taxpayers and make an already complex system of tax brackets more complicated.

It gets worse. It makes it easier for California’s legislatures to tax the state’s citizens even more.

The bill exempts these taxes from the constitution’s supermajority requirements regarding tax increases. The constitution’s supermajority requirements would not be met if a future legislature decided that double the state’s tax collection was insufficient.

Even more amazing about this possible tax grab is the fact that the state’s Legislative Analyst’s Office predicts a 31 billion surplus in the fiscal year.

This huge surplus, however, is not enough to cover universal health care for Californians. It would cost $400 billion to reach this lofty goal, according to estimates. California is trying to raise the $200 billion remaining by relying on the federal government. This is why the tax hike was so shocking.

Don’t you find it crazy that Californians still choose to live and work in the Golden State, given the plans of the state legislature?