When Gov. Gavin Newsom unveiled a much-revised 2024-25 state budget this month, he became visibly irritated when reporters pressed him about raising taxes to cover a $44.9 billion deficit, particularly the corporate tax hikes that left-leaning groups have suggested to avoid spending cuts in health, welfare and education programs.
“When considering the 8.84 % corporate tax – which is the highest, arguably, depending on how you analyze it, in the country – no, I’m not prepared to increase taxes,” Newsom replied. “We have among the highest tax rates in the United States of America for high wage earners, we have among the highest tax rates, as I noted, for corporate taxes. … I feel strongly that we have to live within our means.”
However, the fine print of Newsom’s budget contains several indirect tax increases on businesses – mostly by reducing offsets of taxable income – that over the next few years would raise as much as $18 billion.