Senator John M. W. Moorlach, R-Costa Mesa, issued the following statement following the Senate Governance and Finance Committee’s Informational Hearing on AB 1253, a measure that proposes to increase income tax rates:
AB 1253, a tax-the-rich scheme, is a bad idea. Here are five reasons why:
1) California already has the highest personal income tax rates in the nation;
2) Increased tax rates would encourage members of the state’s highest income earners to possibly seek another state in which to reside;
3) Assuming a static model, it forecasts a massive tax increase, with one report estimating $6.8 billion in additional personal income tax revenues. However, using a dynamic analysis, and the state of Connecticut as a model, raising rates on the wealthy actually reduced personal income tax revenues by 50 percent. What did Connecticut do to make up the difference? It eventually raised tax rates on the middle-class;
4) Higher tax rates hinder economic growth not only now, but for future generations;
5) It hinders the wealthy from other states from moving to California.
California needs to incentivize risk-takers by lowering personal income tax rates. Doing so will create more jobs and revive the self-inflicted COVID-19 economy.
This article was released by the Office of Senator John M. W. Moorlach.