Companies scramble to save loophole
California state assemblyman John Pérez (D-Los Angeles) has proposed legislation that would remove a loophole and effectively raise taxes for some out-of-state corporations to help middle-income college students pay for tuition.
If you’re a college student in California, that’s welcome news. But those mega-corporations — like Chrysler, GM, Procter and Gamble, Kimberly-Clark, and International Paper — are not your friends. They’ve launched California Employers Against Higher Taxes, an effort aimed at stopping AB 1500 from becoming law.
The irony of that name, of course, is that none of these employers have their headquarters in California.
The legislation makes more than $150 million in additional aid available to community colleges, as well as more scholarships for students from families making less than $150,000 year.
Of course, the group California Employers Against Higher Taxes has its own version of reality. Spokesman Peter DeMarco argued that increasing taxes would lead to job loss for the middle class, the opposite of what the bill wants.
DeMarco told the Sacramento Bee:
“It’s a billion dollar tax increase.”
A spokesman for Pérez, however, contends that the benefits to middle-class families would far outweigh the drawbacks of taxing huge out-of-state corporations:
“Every member of the Legislature will have a choice: Will they stand with major out-of-state companies or with working families? We believe the Legislature will stand with California’s middle-class families.”
Strangely, California Employers for Against Higher Taxes has yet to hire lobbyists or make political contributions. You can be that’ll change quickly if the bill begins to gain traction and these giants are faced with the specter of higher taxes.