California Democrats propose raising taxes on big companies to cut taxes for smaller businesses

Democrats in the California Senate proposed cutting taxes for companies making a revenue below $1.5 million by raising taxes on bigger businesses.

All California businesses pay a state tax rate of 8.84% on income, a figure that has not changed since 1997. This new proposal would create two tax rates for businesses in California. Companies would pay 6.63% on the first $1.5 million they make. Any money made above that would be taxed at 10.99%.

The higher tax rate would only apply to about 2,500 companies and would bring in an extra $7.2 billion in revenue for the state. Meanwhile, about 1.6 million businesses would benefit from the smaller tax rate, reducing state revenue by about $2.2 billion.