Contact: David Kline (916) 893-2614 or [email protected]
SACRAMENTO – From the beginning of the legislative session through June 1, state lawmakers considered increasing California’s annual taxes and fees more than $805 billion, including more than $14 billion proposed by Governor Gavin Newsom in his May budget revision, the California Tax Foundation reported today.
The foundation’s Tax and Fee Report identifies proposals including Newsom’s proposal to tax digital software downloads (including monthly “Software as a Service” charges), personal and business income tax increases, a digital advertising tax, a new tax on workers and employers to fund a government childcare program, a tax increase on California research, and numerous sales tax increases that would increase the cost of living in California.
The foundation reviewed every bill introduced in the Legislature and found 141 that proposed a new tax or fee. The projected cost to taxpayers can be quantified for 46 of the measures, while fiscal estimates for the remaining measures are not yet available.
Bills proposing fines or penalties for violating state or local laws were not included, nor were state and local ballot measures (like the proposed wealth tax and extension of a “temporary” personal income tax increase) that don’t require any legislative action.
The tax proposals with the highest costs to taxpayers include bills that would create a government-run healthcare system, increase climate-related taxes, impose sales tax on software downloads and ongoing software usage, and increase taxes on corporations by eliminating the water’s-edge election (a reform enacted by California and other states to avoid the double-taxation of business entities and halt a tax war with important international trading partners).
The Tax and Fee Report is a regular publication of the California Tax Foundation, updated throughout the year to reflect new legislative proposals. The report includes any measure estimated to cost $1 million or more per year in higher taxes or fees.
The California Tax Foundation, a nonprofit organization founded in 1980, improves public policy through independent, nonpartisan research.