A $12 billion tax hike is coming for Californians next year, thanks to the Republican tax bill championed by Congresswoman Mimi Walters (R-Irvine). According to an analysis by the Franchise Tax Board, new caps on tax deductions included in the Walters-backed bill is the main factor in higher taxes for many Californians.
While a handful of households earning more than $1 million will see a tax increase, the overwhelming majority seeing a hike will be households making less than $250,000 per year.
“About 751,000 households with incomes under $250,000 probably will owe more tax,” according to the Sacramento Bee. “California Democratic leaders have been wary of how the tax law will play out. Gov. Jerry Brown called it ‘evil in the extreme,’ arguing that it primarily benefits wealthy people and swells federal deficits by hundreds of billions of dollars.”
According to economists, Brown is correct about the bill benefitting primarily the wealthy. Next year, the richest 1 percent will see a tax break of more than $50,000, while the poorest 20 percent must be content with a mere $60 spread out over the course of the entire year.
While California residents are forced to pay more taxes, Wall Street banks are getting a $19 billion kickback. It just so happens that Walters’ campaign is funded by the “Finance, Insurance, and Real Estate” sector to the tune of $383,000, according to the Center for Responsive Politics. That amounts to almost 20 percent of Walters’ total campaign fundraising.
In April, Walters abandoned her district to fly to Texas and rub elbows with Speaker Paul Ryan (R-WI), Republican consultants, and Republican donors. She hasn’t held an in-person town hall in her district in more than 550 days, but made time to meet with Ryan and corporate donors.
The deficit-financed tax bill was sold as “rocket fuel” for the U.S. economy. But the most recent data from the Labor Department shows job growth and wage growth hasn’t changed significantly, despite the promises of Republicans like Walters.
And even if some Californians see more in their paychecks, higher health care costs could cancel out any possible savings. In California, health care premiums are expected to increase by up to 30 percent next year, and provisions tucked into the tax bill are playing a significant role in the increases.
Between tax hikes and higher health care costs, it is no surprised that 61 percent of Californians have a negative view of the tax bill.