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President Joe Biden is right. The Trump administration’s massive tax cuts have only benefited the world’s largest corporations.
Mega corporations like FedEx, Nike, General Motors, Ford, Chevron, and dozens of others, worth billions of dollars, pay little or nothing in federal taxes.
At the same time, Trump’s tax bills have worsened our national debt and hurt our economy. In total, the cuts cost our nation nearly $2.3 trillion and increased the federal deficit by $2 trillion.
Biden in 2012 In 2017, he proposed to partially reverse the Trump tax cuts, which reduced the federal corporate tax rate from 35% to 21% by 40%. Under Biden’s plan, the corporate rate would increase modestly to 28 percent.
The President’s plan is smart, sensible, and responsible, and it will help balance our federal budget. That plan, however, is being stalled by Republicans who control Congress, so Trump’s tax cuts appear to be here to stay.
This does not mean that the fight for justice is over. California has a chance to follow the president’s lead and reclaim some of Trump’s tax handouts. The California Senate will get our progressive budget plan right, while helping small businesses—the backbone of our economy hurt by inflation—and funding our schools, homelessness programs, climate protection, child care and more.
A generation ago, large corporations paid a higher tax rate in California and had a larger share of our state’s tax burden than they do now. In the year In the early 1980s, corporations that reported profits in our country paid a state tax of 9.6% of their income. But under Republican leadership George Deukmejian and Pete Wilson, the state’s corporate tax rate was lowered twice to 8.84% — where it still stands today — for all businesses, big and small.
The Senate budget plan would reverse some of Trump’s tax giveaways by raising the tax rate on California’s largest corporations. The new 10.99% rate applies only to about 2,500 corporations located throughout the US that generate more than $1.5 million in taxable income from doing business in California. The tax rate will affect the nation’s biggest companies, from Walmart and Amazon to the headquarters of Coca-Cola and Chevron.
Small companies doing business in California — the other 99.8%, or roughly 1 million businesses — get a 25% tax cut. Most small businesses have seen rising costs and could use some help right now. In addition, our Senate plan provides $1.9 billion in tax relief for renters and low-income families, who deserve much-needed relief from inflation.
Overall, our proposed higher tax rate on mega-corporations would generate $6 billion a year in revenue for California. And it will help us avoid the budget cuts we face this year in everything from housing to transportation, broadband and climate and green energy investments.
That’s why we’ve named our budget plan “Sustain Our Growth.” It will protect the transformative progress California has made over the past several years to create a fairer economy for all.
He’s doing this by asking big corporations to pay their fair share and honoring President Biden’s call to reclaim some of the giant corporate magazines from the Trump era.
Guest Comment written by Nancy Skinner. State Sen. Nancy Skinner, D-Oakland, chairs the Senate Budget Committee.
California faces a $31.5 billion budget deficit in 2023-24. Senate Republicans have urged Democrats to be cautious about spending decisions and drop proposals to raise taxes on major corporations.
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