Fong proposes help for middle class

Fong proposes help for middle class

Fong proposes help for middle classBy VINCE FONG, California Assembly

Traveling across California, the most common story I hear is the struggle to try to afford to live and work in our state. Too many families are living paycheck to paycheck as they watch the cost of groceries, gasoline and rent go up. Seniors are living on fixed incomes trying to make ends meet. Small-business owners are struggling to stay open in an ever-growing burdensome business climate.

These stories are the reasons why I am introducing the California Competitiveness and Innovation Act of 2018 in the coming weeks?—?a tax cut proposal to provide relief for middleclass families and small businesses.

California has the highest state personal income tax rate, the highest sales tax and the second highest gas tax in the nation. Furthermore, the nonpartisan Legislative Analyst Office forecasts that California will see upwards of $19 billion in surplus tax revenue over the next year. California taxpayers work hard for their income?—?we should work just as hard to protect it and allow you to keep more of it.

The framework of our tax cut proposal is simple:

(1) Reduce the state personal income tax for middleclass individuals and families

(2) Eliminate the franchise tax on small businesses

(3) Increase the homeowners property tax exemption

Here are the details of each major component.

Lower State Personal Income Tax

Our proposal cuts 1 to 2 percent off all personal income brackets up to $300,000. By lowering the income tax rate, all middleclass families can benefit even more from federal tax reform.

Eliminate Franchise Tax

Our proposal eliminates the $800 franchise tax on small businesses. California is the only state in the nation with a franchise tax on small businesses, which means that we are at a great competitive disadvantage compared to other states. Small businesses, many of which have 0 or 1 employee, already face a multitude of challenges just to survive. Eliminating the franchise tax would help California’s competitiveness and our small business community stay in business.

Increase the Homeowners Property Tax Exemption

Our proposal increases the property tax exemption from $7,000 to $14,000 and would go up automatically with inflation. California’s property-tax exemption has not increased since 1972, when the prices of homes were only a fraction of what they are now. California’s housing affordability problem is very well-known. This much-needed increase would make housing a bit more affordable, especially for middle class families.

Ordinary Californians feel ignored by our state government. We need to begin to have a real discussion on how we help families and individuals who are constantly squeezed by poor policies coming from Sacramento.

Story First Published: 2018-01-19