DRIVING THE DAY: Tom Steyer is telling union leaders in California that he’d back a special election to raise corporate taxes in his first year as governor as he tries to solidify his claim to the progressive lane in a crowded Democratic field, Melanie Mason scoops.
Steyer confirmed the discussions in an interview and said the details of such a move are yet to be hammered out.
“The big Republican bill is really going to hit the California budget, and that is going to blow a hole in it,” Steyer told POLITICO, referring to health care cuts in the megabill passed last year. “We really can’t wait. We’re on the clock. And so, yes, the only way to pass that is with a special election.”
PAYING THE PRICE: A California state lawmaker is on the cusp of proposing a penalty for big companies with large proportions of workers who rely on social safety net programs — another long-sought progressive tax idea that will be debated in Sacramento this year.
Mia Bonta told Playbook she plans to introduce legislation this week, although she is still tailoring which corporations to target and how to structure the penalty. Bonta, an Oakland Democrat, still faces an uphill climb to get the support she’ll need from Gavin Newsom and her similarly tax-averse moderate colleagues.
But the idea — a legislative pipe dream as recently as last year — shows how a contentious ballot measure to impose a one-time wealth tax on billionaires and deep federal cuts to Medicaid have forced the conversation. Progressives are supporting Bonta’s effort in conjunction with legislation that would end a policy that allows companies to avoid taxes by shifting some of their profits to other countries.
“My ideal proposal would make sure that we are creating a seamless way to be able to look at the corporations that have very high profitability and also have instances where their employees are receiving social benefits, either Medi-Cal or any other kind — CalFresh, or what have you,” Bonta said. “That would be where I would like us to be able to focus our energy.”
If the state has to backfill over a billion dollars in federal health care funding losses next year, some lawmakers would rather see that money come from corporations rather than individual taxpayers.
Democratic Assemblymember Rebecca Bauer-Kahan is one of those lawmakers. She told Playbook she wouldn’t back a wealth tax, citing concerns about billionaires moving out of California. But she’s open to at least looking at a corporate penalty.
Labor giant SEIU is backing the effort, which Executive Director Tia Orr is framing as a way to push back on President Donald Trump’s mega-spending bill, which included $900 billion in corporate tax cuts. California taxpayers, she said, are subsidizing those companies’ benefits to the tune of $28 billion per year.
This argument dates back more than a decade: Large companies that underpay employees and provide few benefits, forcing them to rely on government-funded programs, should help to pick up the tab.
In 2013, then-Assemblymember Jimmy Gomez, who is now in Congress, carried a bill that would have penalized companies with 500 or more employees if their workers qualified for California’s Medicaid program.
It failed on the Assembly floor after facing opposition from business groups that argued it would hurt job creation.
Orr said things are different under H.R. 1, and lawmakers looking at years of Trump-related health care cuts will be hungry for a long-term budget solution.
“This is our top priority, we’re going to be out there aggressive and loud and hitting every legislator,” she said.