published on June 12, 2020 - 10:28 AM
Written by Gordon Webster, Jr.

The latest “Job Killer” legislation to see the light of day in Sacramento is AB 398, authored by Assemblymember Kansen Chu (D-San Jose), which institutes a headcount tax on employers.

In the middle of pandemic, when employers are simply struggling to say afloat, this asinine proposal adds a tax of $275 per employee for “an entity, including, but not limited to, a limited liability company, corporation, or limited liability partnership, that has more than 500 employees that perform any part of their duties within the state.”

The California Chamber of Commerce, which identifies and has a strong record of defeating Job Killers, sent an opposition letter to lawmakers making the common sense argument that AB 398 would “strongly disincentivize” employers to hire more than 499 employees, since that 500th employee brings along $137,500 in new taxes.

“During times of economic prosperity AB 398 would be a job killer,” the CalChamber states in the letter. “During this time of economic crisis, AB 398 is catastrophic.”

The CalChamber also notes the old tax policy adage: If you want less of something, tax it. No one in their right mind would advocate a position of less jobs for California. So the reasoning behind AB 398 makes little sense, other than making us less competitive in the eyes of large employers.

Like the split-roll tax measure that has qualified for the November ballot, AB 398 is a wolf in sheep’s clothing. The revenue collected would go to K-12 education, but at what cost? What kinds of jobs can California students expect to earn when they graduate into an economy where regressive measures hobble job creation?


e-Newsletter Signup

Our weekly poll

Should K-12 schools open for in-person classes this fall?

Loading ... Loading ...

Central Valley Biz Blogs

Popup
shares

3/5

Article views

remaining

Sign up icon

To continue website access to

TheBusinessJournal.com

please create a FREE account OR login here.

1/5

Article views

remaining

SKIP THE POP-UPS
For only $59 for one 1-year you will receive the Print edition along with EVERYTHING The Business Journal has to offer digitally, PLUS you will have unlimited 24- hour a day access to view articles at

TheBusinessJournal.com

Use Promo Code

*New Subscribers Only

Digital and Print

XX Days Remaining

until you can view 5 more free articles

Sign up icon

Want access? Subscribe now & save $20 OFF.

Use Promo Code

WEBSUB20

* NEW SUBSCRIBERS ONLY