California Universal Basic Income Program: Personal Income Tax.
Impact
This legislation aims to provide a steady income stream to vulnerable populations, thereby enhancing economic security and reducing poverty within California. The implementation of the CalUBI program may potentially reduce dependency on other state assistance programs by providing unconditional cash payments that recipients can utilize according to their personal needs. Additionally, by establishing a continuously appropriated fund, the bill seeks to ensure the stable financing of the CalUBI initiative, contingent on legislative appropriations.
Summary
Assembly Bill 65 establishes a California Universal Basic Income (CalUBI) Program financed by a new income tax structure. Beginning January 1, 2022, the bill proposes to impose a tax of 1% on any taxable income exceeding $2 million annually. The funds generated from this tax will be directed to the Universal Basic Income Fund, which is set up to disburse a monthly payment of $1,000 to eligible California residents aged 18 and above. To qualify for this financial assistance, residents must have lived in California for at least three consecutive years and have an income not exceeding 200% of the median per capita income for their county, as determined by the U.S. Census Bureau.
Sentiment
The general sentiment surrounding AB 65 is largely progressive, aimed at innovating social welfare to adapt to contemporary financial challenges faced by Californians. Supporters believe it will promote financial stability among low-income households and stimulate the economy through increased consumer spending. However, there are concerns from some financial conservatives regarding the sustainability of the funding source and the potential impact on high-income earners, indicating a divide in public opinion about the broader economic implications of such a program.
Contention
Notable points of contention revolve around the proposed tax increases. Critics argue that the 1% income tax on high earners may deter investment and economic growth, suggesting that it could create disincentives for wealth generation within the state. Additionally, there are concerns regarding the long-term viability of the Universal Basic Income Fund and whether it can sustain consistent payouts during economic downturns. The bill also requires a two-thirds majority approval in both houses of the Legislature, reflecting the contentious nature of increasing tax levels.
Personal income taxes: voluntary contributions: California Breast Cancer Research Voluntary Tax Contribution Fund and California Cancer Research Voluntary Tax Contribution Fund.