The Legislature adjourned Monday without passing A.B. 1253, which would have created a 1% tax on people earning from $1 million to $2 million, 3% for up to $5 million and 3.5% for more than $5 million. The bill, principally authored by Assembly member Miguel Santiago, D-Los Angeles, was estimated to bring in $6 billion in annual revenue.
Lawmakers also adjourned without advancing A.B. 2088. The measure would have applied a 0.4% tax on net worth above $30 million, which would have affected about 30,400 people and increased state tax revenue by $7.5 billion annually, according to the office of Assembly member Rob Bonta, D-Oakland, who principally authored the bill. The tax would have applied to all assets and liabilities except real property.
The failure to advance either bill to California Gov. Gavin Newsom's desk comes after he signed a budget that accounted for a $54.3 billion revenue drop attributable to the novel coronavirus pandemic through net operating loss deduction suspensions, tax credit limitations and spending cuts that would be triggered if the state doesn't receive additional federal aid. California, like many states, has seen steep revenue declines because of COVID-19, the respiratory disease caused by the coronavirus.
Newsom, who plans to propose a budget in January, has warned state lawmakers should be careful about following federal proposals to tax the rich at the state level, arguing that such proposals are a "national construct" that has different consequences at the state level that could hurt competitiveness.
Proponents of the measure, including California Federation of Teachers and Commit to Equity, a coalition of California organizations that includes unions and environmental groups, have said that without tax increases for the wealthy, health care, education and community service will likely face cuts.
Representatives for the Senate's president pro tempore, Sen. Toni Atkins, D-San Diego, Assembly Speaker Anthony Rendon, D-Lakewood, Santiago and Bonta did not immediately respond to requests for comment.
The California Federation of Teachers and Commit to Equity did not immediately respond to requests for comment. The California Taxpayers Association, which opposed the measures, did not immediately respond to a request for comment.
--Additional reporting by James Nani, Paul Williams, Alan K. Ota, Dylan Moroses and Maria Koklanaris. Editing by Vincent Sherry.
For a reprint of this article, please contact email@example.com.