On the heels of a reckless and shameful federal tax giveaway to Republican campaign donors, California should send a message loud and clear: “We don’t want your stinking cuts.” Our economy is out-performing most states in the nation as it is, and we don’t want the devastating cuts to health care and social services that will soon accompany the revenue cuts at the federal level.
The California legislature should enact our own state-level tax reform that will recoup the billions of dollars that Congress has handed over to the wealthiest one percent of our society and reserve those funds to cover the coming decreases in federal spending for programs in California like Medicare and MediCal. While it may not be possible to precisely offset the effect of the federal bill, California should aim to increase our state revenue in the same total amount and from the same sources as the beneficiaries of the congressional largess. For instance:
· Congress eviscerated the federal estate tax, allowing the wealthiest families to pass on up to $22 million in unearned inheritance tax free to trust fund babies who might never work a day in their lives. California should respond by creating our own state-level inheritance tax, joining the 16 other states that already have one.
· California should mirror the rate cuts in federal income tax brackets with comparable increases in our state income tax rates.
· California should raise our corporate income tax and reverse the unwarranted benefits in pass-through companies added at the last minute to the federal bill, to the great personal benefit of Senator Bob Corker , Donald Trump, and other real estate developers.
· California should increase its Alternative Minimum Tax (AMT) to offset decreases in the federal AMT.
· California should increase its mortgage deduction to offset decreases in the federal mortgage deduction that unfairly targeted states with high housing costs like California.
The objective of an UnCut California tax measure should be to ensure that no Californian pays any additional amount in total tax payments, or receives any overall cuts from what they pay now. We should then earmark all proceeds to offset the federal austerity measures that will now be coming as a result of the irresponsible federal deficit that the GOP is going to create with the federal cuts.
California will then be poised to watch our economy keep growing while red states go the way of Kansas, which wrecked its state budget and economy with a distastrous tax cut plan devised by the Koch Brothers. That plan served as the model for the federal bill, which may well yield similar results.
It will be painful to watch our fellow Americans in other states suffer under the economic havoc that will come from this federal tax boondoggle. California should do our part in electing a new Congress in 2018 that can repair some of the damage. But in the meantime, it’s time our state legislature puts California first.