California Democrats have regained the supermajority in the state legislature – and there’s been speculation Assemblymember Mike Gipson (D-Carson) might re-introduce a bill now that the Dems have more power.
AB-2731 failed earlier this year. If passed, it would have implemented a 17 percent tax hike on venture capitalists, hedge funds and private equity firms. The new money would have gone to California schools, so the bill received a lot of support from labor and teachers unions.
But an opposition-funded study into the possible economic impacts of Gipson’s bill was released earlier this month. It found that the new tax hike would make it implausible for the firms to remain in California by raising the state taxes to more than 30 percent. Combined with federal taxes of about 40 percent, high-end money managers remaining in California would be looking at 70 percent taxation – and if those businesses left, the state would lose $2 billion in tax revenue, among other negative effects. Some see it as a pre-emptive strike to ward Gipson off from re-introducing the bill.
Larry sits down with the study’s researcher and a reporter to get the latest on the bill’s chance of reintroduction, and what it could mean for California’s economy.
Dan Morain, Sacramento-based senior editor with CALmatters; he tweets @DanielMorain