In a move that has sparked controversy, California’s Democratic-controlled legislature has rejected a Republican proposal that would have exempted tipped-income from state income taxes. The proposal, similar to ones endorsed by both Vice President Kamala Harris and former President Donald Trump, aimed to provide much-needed relief to service workers grappling with California’s high cost of living.
Republican State Senator Rosilicie Ochoa Bogh, who introduced the amendment, expressed disappointment over the legislature’s decision. “It is deeply disappointing that the legislature chose not to consider a proposal that could have provided much-needed relief to California’s workers,” she stated in a press release following the defeat of the measure.
The amendment, introduced in the California Senate on Thursday, would have granted service industry workers a state tax exemption on tips. However, the proposal was voted down on a largely partisan vote, with the Democratic majority choosing to avoid discussion or debate on the matter.
This attempt to exempt tips from taxes in California comes amidst a nationwide movement spearheaded by both Trump and Harris, who have voiced support for federal tax legislation exempting tipped-income during their respective campaigns. Trump initially championed the proposal during a June rally in Nevada, while Harris, a former California Attorney General, echoed similar sentiments during an August rally in Las Vegas.
According to a press release issued by California Senate Republicans, the proposed amendment aimed to assist service workers in navigating the state’s “unsustainable tax burden.” The goal was to allow workers who rely heavily on tipped-income to increase their take-home pay.
All nine Republican state senators supported the amendment, while nearly all Democratic senators, except for Senate President Pro Tempore Mike McGuire and State Senator Nancy Skinner, voted against it. McGuire and Skinner opted to abstain from the vote.
Republican Senate Minority Leader Brian W. Jones criticized the Democratic majority’s decision, stating, “The negligence involved in a refusal to even debate a policy issue of this magnitude cannot be overstated. Legislative Democrats knew they were on the wrong side of this important issue, so they chose to sweep it under the rug rather than do the right thing for working Californians.” He further lamented that despite the national push to eliminate the federal tip tax, California Democrats considered the issue unworthy of discussion at the state level.
McGuire’s office did not immediately respond to a request for comment regarding the Democratic majority’s opposition to the amendment.
