The hole in the budget due to quarantine California wants to close due to new tax

On the background of the economic consequences of the pandemic in the fashion industry, some companies are considering leaving California, says Fox Business.

Дыру в бюджете из-за карантина Калифорния хочет закрыть за счет нового налога

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California legislators are considering a law about recovering from the pandemic of coronavirus, which includes the taxation of large enterprises of the state new tax, at a time when some of its most notable brands in Silicon valley are already considering the possibility of moving headquarters to other places.

The law on local self-government, rehabilitation of schools and provision of assistance, which was last modified in the California state Senate in late may, includes a proposal to tax “big business”. In particular, companies with more than 500 employees, “who perform any part of their actions in the state” will pay an additional tax in the amount of $ 275 for each employee.

According to Governor Gavin Newsom, as the state struggles with the effects of the virus, he is faced with a budget hole 54 billion dollars.

The tax, first announced by the Tax Foundation, will take effect in January 2021 and will apply until December 2026.

In any other state there is no “capitation” tax on employees.

Seattle has approached the introduction of this tax in 2018, it has also been set at $ 275 per employee per year (for companies whose income exceeds $ 20 million). Although this measure was unanimously approved by the city Council, it met strong resistance from local businesses, including Amazon and Starbucks. Amazon said that it will review projects in the city, if the measure will come into force.

Ultimately, Seattle is not implemented this policy.

Amazon believe this measure is a “tax on jobs”, which can be problematic at a time when California is struggling with high unemployment. In April, the unemployment rate in the state was higher than the national average of 15.5% (the state lost more than 2.3 million positions).

Meanwhile, in the background of the economic consequences of the pandemic in the fashion industry, some companies are already considering leaving the state.

Elon Musk, who entered into a dispute with the authorities of the state of California and local officials in the Alameda County about the quarantine measures that forced to close its plant at Tesla, said that it is considering the issue of relocation of the headquarters of the company in Nevada or Texas.

Peter Thiel and the company-software developer Alex Karp, Palantir Technologies, you can not stay in California after the crisis subsides. Although no final decision was made, Karp suggested that Palantir can move anywhere in Colorado.

Silicon valley is also at risk of losing residents, since a huge number of employees may not return to the offices. For example, the social networking giant Twitter said that the officers who can perform their duties remotely, can continue to do so forever. Soon after Facebook CEO mark Zuckerberg followed suit with the same message.

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