Taxing Big Tech?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

If the Proposition 15 commercial property tax increase remains behind and ultimately is rejected when all votes have been tabulated, pro-taxers in the legislature will look for other avenues to increase revenue. One such approach might be taxing big tech, which has weathered the pandemic storm better than most industries. Don’t be surprised if other members of the California business community do not rally to big tech’s defense. 

A number of technological companies helped fund the Yes on 15 campaign, most notably, the Chan Zuckerberg Initiative funded by profits from Facebook and other tech sites under the Facebook/Zuckerberg umbrella. 

Many California business leaders opposed to Proposition 15 were not happy with the tech contributions to the Yes side. Upset that big tech companies helped fund an initiative that would have, in the eyes of many in the business community, damage the state’s economy and particularly put unreasonable burdens on small businesses, they have expressed little sympathy for the tech sector if the tax raisers look their way. 

There are other avenues that will probably be pursued for those who desire more revenue by the Democratic majority in the legislature. While Gov. Gavin Newsom expressly rejected the idea of a wealth tax when he endorsed Proposition 15, the idea of an increased income tax, proposed by the California School Boards Association last year, will probably make a reappearance in one form or another. 

Big Tech could be in for a rough ride once the election dust has settled. Already in Washington, Congress has raised objections to how Big Tech does business, claiming monopolistic practices and too much censorship of political opinions. The criticism comes from both sides of the political aisle. 

In addition, the question of taxes paid by companies like Amazon have raised concerns, particularly by president-elect Joe Biden. If the taxes on big tech become an issue in trendsetting California, pressure to raise taxes on technological companies will only intensify. 

As for the tax talk in California, the tech companies can only blame themselves. They are an independent lot who went their own way, ignoring concerns raised by other industries in the business community over economic problems in the state.

This raises an old issue that I have harped on before. If the business community remains united and presents a strong front on numerous issues it becomes an indomitable force. There should be strong, year-round campaigning to support a growing, healthy California business climate. However, the reality is individual industries are quick to step up to champion their own interests but are less willing to come to the aid of other businesses against government action. 

If the tax raisers and pro-government spenders want more revenue, the next legislative session will come with numerous plans and big tech could be a target. Because of actions in the recent election, the industry may find little support from others in the business sector.

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