Eliminating a corporate tax break is pitched as a way to make up for federal healthcare cuts

"The tax bills of the wealthiest, most powerful corporations in the world are at all-time lows. Meanwhile, we're struggling to fund programs that feed children - I think everyone understands that now is the time for long-term budget solutions."

"California already has the reputation of being not particularly business friendly. This would really just compound that. The legislation would lead to double taxation, meaning the same income would be taxed twice by different countries, and compared taxing corporations' foreign profits to enacting tariffs."

Assembly Bill 1790 seeks to repeal California's "water's edge" tax break, which permits multinational corporations to exclude foreign subsidiary income from state taxation. The proposal has support from unions and Democratic lawmakers who argue that corporate tax rates are at historic lows while state programs face funding shortages. Republicans oppose the legislation, citing concerns about double taxation and business competitiveness. They contend that taxing foreign profits would harm California's business reputation. The repeal could generate substantial annual state revenue to address budget deficits and federal funding cuts. Governor Newsom has not publicly stated his position on the proposal.

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