As Californians sit down to complete their tax returns by today’s deadline, hundreds of thousands of middle-class households are realizing that the Trump tax cut was no tax cut at all. In fact, it was a huge tax increase.
According to a 2018 analysis by the California Franchise Tax Board, the 2017 Trump tax overhaul will cause more than 750,000 middle-class households in California to pay more to the Internal Revenue Service, costing California residents about $12 billion a year in higher taxes.
By contrast, large corporations won big. With corporate profits at close to an all-time high, Trump’s tax bill gave corporations an enormous windfall, slashing the corporate tax rate from 35 percent to 21 percent. The result: Large, highly profitable corporations that do business in California got to pocket an extra $13 billion to $17 billion a year, money they previously paid to the IRS.
In other words, the Trump tax overhaul effectively takes $12 billion annually from many California residents and hands it to large corporations. Indeed, the Trump tax cut seemed almost designed to punish blue states like California — in order to finance a giant corporate giveaway.
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