It’s no secret that “California” is synonymous with “high taxes”, and the state’s recent legislative session shows they have no intention of shirking that title. Over $203.7 billion in new taxes and fees are being considered, and a budget of $310.8 billion was signed – which will force a $15-18 billion deficit over the next three years and prompt a plethora of additional tax and fee proposals and increases. Utah would do well to steer clear of influences and ideas from the Golden State.
Two particularly egregious proposals warrant further review:
SB 220 – Corporate Tax Increase ($7.2 billion)
This bill would give California the highest corporate tax rate in the nation – 10.99%, up from 8.84%. Proposals such as this are why California is ranked 45th in the nation for economic outlook, and 18th in the nation for economic performance. Utah, by comparison, with its flat, low tax rate of 4.65%, is competitively positioned to entice businesses to operate and grow in the state and bring with them jobs, wages, expenditures and community. Utah understands that business is the lifeblood of a state, and is consequently ranked 1st in the nation for economic outlook and 2nd for economic performance. Maintaining a low corporate tax rate – or eliminating it entirely – secures Utah’s economic future.
AB 259/ACA 3 – Wealth Tax ($22.3 billion)
This bill would introduce a 1% tax rate on residents’ worldwide net worth more than $50 million, including art, collectibles, real property, pension funds, financial assets held offshore, farm assets, mutual funds, index funds, and stocks, etc. This avaricious proposal is as unfair as it is unwise. The wealthy pay their fair share of taxes – on a federal level, the top 1 percent pay 26% of all income taxes – and states need wealthy residents to remain to pay taxes and spend in their state. This bill, if passed, will result in even more wealthy Californians relocating to preserve their capital. Utah, by contrast, imposes a low, flat tax rate and does not penalize wealthy residents through additional taxes. By prioritizing taxes based on consumption, such as sales tax and gas tax, Utah ensures that those who consume more, pay more, without mandating a sanction for financial success.
These are only two of the dozens of bills that would impose more fees on Californians. From additional fees on pet foods to a candy tax to a local chlorine tax to a marriage license tax, the state of California is determined to extract capital from its residents in every facet of life. Utah is not immune to these proposals, but must reject them soundly to avoid the slippery slope of excessive taxation to satisfy the insatiable appetite of government bloat and expansion.