For millions of Californians, the state has been rendered unaffordable because of foolish and counter-productive policies emanating from Sacramento. A shocking one-third of California renters spend at least half of their take-home pay on rent, and only 40 percent can afford to purchase a median-priced home. Little wonder, then, that one in five Californians lives in poverty — the highest poverty rate in the nation.
Small businesses are struggling as well. Nationwide, nearly ten percent of new entrepreneurs start from at or below the poverty line, but according to the Institute for Justice, California is third worst in terms of burdensome licensing laws.
At every moment of every day, Californians are taxed. We have the highest personal income, sales, and gas taxes in the nation. Even though Sacramento is sitting on a $4.6 billion budget surplus, high state taxes are continuing to gouge hard working Californians. In fact, over $15 billion in annual tax increases have been enacted since Gov. Brown took the reins in 2010.
Thankfully, there is a better way to improve the lives of all Californians.
Taxpayers, small businesses, families, homeowners and renters can finally get some relief through the California Competitiveness and Innovation Act (AB1922), which was recently introduced in the state Legislature and is supported by the Howard Jarvis Taxpayers Association.
Small businesses employ about half of our state’s private sector workforce, providing people with their jobs and livelihood. The people who own these businesses are our friends, neighbors, brothers, sisters, moms and dads who are being stripped of their hard earned dollars by non-stop tax and fee increases year after year.
California needs to reverse its notorious reputation of being anti-business. We can start by eliminating the $800 franchise tax on small companies. An $800 annual tax on a business that might earn as little as $9,040 a year is absurd. No other state in the nation discourages businesses by imposing such a tax.
The bill will also lower the state personal income tax rate for ordinary Californians. Working-class individuals and families struggle enough as it is, and even though wages are on the rise, they haven’t kept up with the high cost of living. The proposal will allow working and middle class families to pay a lower state income tax rate. California should encourage people to work hard and dream big in this state without worrying if they can afford to live and work here.
Tax relief can also help address California’s housing crisis. The state needs to build 180,000 new units of housing a year for the next ten years simply to keep pace with demand. Right now, the state builds roughly half that. To keep that figure in perspective, since 1990 there have only been four years where the state built at least 180,000 new units of housing, and none since 2005. Rents are at record highs because the state has failed to build additional housing stock.
To ease the burden, AB1922 would double the renter’s tax credit which would provide meaningful savings, especially for millennials and minorities trying to afford their first home. For homeowners, the bill doubles the homeowners property tax exemption. This exemption has not been raised since 1972. Back then, the median home price was $25,000. Today, it’s over $500,000.
Meaningful tax relief will allow families to control their own future by allowing them to put money away for retirement, investing in lifelong dreams, or saving for their children’s college education. Tax relief might also help keep our citizens in California instead of moving to Texas, Nevada or Florida where taxpayers are actually respected.
— Jon Coupal, president of Howard Jarvis Taxpayers Association.
— Assemblyman Vince Fong, 34th Assembly District