OPPOSE AB 1253 (Principal Co-Authors: Chu and Skinner)

August 18, 2020

Senator Mike McGuire, Chair
Committee on Governance & Finance

Re: Oppose A1253 (Principal Co-Authors:  Chu and Skinner) 

Inland Action opposes A1253 (Chu and Skinner)   

California already “enjoys” the highest marginal tax bracket in the United States.  To raise the marginal bracket even higher will not generate the income expected and, in fact, will have the effect of causing job loss in California. 

Research conducted by Joshua Rauh and Ryan Shyu of the Hoover Institute at Stanford University shows that 2 years after California’s 2012 retroactive personal income tax hike, California was only collecting 40 cents of every dollar it had expected to raise from the higher levy.  Further, in another study, Xavier Giroud and Joshua Rauh found that for each 1 percentage point increase in individual income tax rates that the average state implements leads to a loss of up to 0.4 percent of all non-corporate jobs in a state. 

In a time of national crisis with the COVID-19 pandemic occupying and consuming all of our lives and businesses, to raise taxes now sends the wrong message to California business leaders.  The message it sends is:  California does not embrace the growth and benefit which you provide this state.  The message it sends is:  Why are you still in California and why haven’t you fled, like many others, to a non-tax state such as Nevada, Texas and Florida?   

It has often been said that people vote with their feet.  If AB 1253 passes, there is a serious and deep concern that many of our most productive business leaders will “vote with their feet” and leave California.  The passage of AB 1253 will provide those business voters “on the fence” to finally decide to leave the state.  

For these, and other reasons, Inland Action strongly opposes A1253. 


Carole Beswick, CEO