Proposed Constitutional Amendment Would Double California’s Corporate Tax Rate
California Assemblymen Kevin McCarty (D) and Phil Ting (D) and other state lawmakers have introduced a constitutional amendment that would double the state’s corporate tax rate, from 8.84 percent to 18.84 percent. Forbes reports the proposed new tax rate “would apply to both standard corporations and S corporations” but “would not apply to other pass-through structures like limited liability companies or partnerships.”
According to the nonpartisan Tax Foundation, if enacted, the 18.84 percent levy would be the highest corporate rate in the nation by far. Iowa, whose highest corporate tax rate currently is 12 percent, is currently home to the highest state corporate rate. The Tax Foundation says, nationally, the average top marginal corporate income tax rate is 6.5 percent.
According to The San Francisco Chronicle, “the bill would require approval from two-thirds of the Legislature to pass, a difficult hurdle now that Democrats have lost their supermajority” in the state’s General Assembly.