California taxpayer advocates were disappointed the Legislature recently shot down Assemblyman Kevin Kiley’s proposal to repeal Assembly Bill 5, despite numerous stories from contractors who had come forward to explain how the legislation harms them.
AB 5 is a counterproductive policy that involuntarily reclassifies many independent contractors as employees. The law harms the very workers it claims to help by eliminating their flexibility to set their own schedules and sometimes putting them out of work entirely. The nonpartisan Legislative Analyst’s Office estimates AB 5 will impact over 1 million contractors and freelance workers in California.
AB 5 also raises taxes. Before AB 5, independent contractors were eligible for tax deductions for job expenses such as travel, vehicle expenses, and work supplies. Workers classified as employees are no longer eligible for these tax deductions, so the result is a huge increase in tax liability. And because AB 5 impacts such a broad cross section of industries including transportation, arts and entertainment, journalism, healthcare, and finance, to name just a few, all California households will be hit with a hidden tax as consumer costs rise across the whole economy.
That’s why the California Taxpayer Protection Committee is working with taxpayer organizations throughout the state to get our Legislature to repeal this unfair law.
When Assemblyman Kiley’s repeal bill was considered on the Assembly Floor, we joined with the Placer County Taxpayers Association, Solano County Taxpayers Association, Napa County Taxpayers Association, and the Alliance of Contra Costa Taxpayers to urge lawmakers to do the right thing and pass Assemblyman Kiley’s legislation
Unfortunately, our Legislature has been unwilling to listen to taxpayers and the many diverse voices across the political spectrum urging the repeal of AB 5, but perhaps now is an appropriate time for legislators to re-evaluate their positions.
The pro-tax California political establishment was taken aback this March 3rd. Current vote count totals indicate that the statewide Proposition 13 school bond is headed to defeat by a 55-45 margin and numerous local bonds and taxes were also rejected to the shock of their overconfident proponents. California taxpayers are currently frustrated by Sacramento’s lack of fiscal responsibility, and our political leaders should listen to the message voters are trying to send them. AB 5 is a tax increase that California doesn’t need, and now is the time for a repeal.