California lawmakers are preparing to vote on two major tax increases Thursday that could impact health insurance rates and the cost of digital software statewide.
The state Senate will take the final vote on these taxes at 9 a.m. One proposal involves an increase in taxes on health plans, which experts say will raise rates for individuals with private health insurance by an average of $100 per year. This tax is expected to generate $2 billion annually to help fund Medi-Cal, the state’s health insurance program for low-income residents.
The second tax increase would impose a new sales tax on digital software, including programs like Microsoft Office, QuickBooks, Slack, and Workday. This tax, starting at 7.25%, could vary depending on the region of California where the software is purchased or used. The measure is projected to bring in approximately $900 million annually for the state’s general fund.
Business groups have warned that the digital software tax will impact every business in the state and could lead to higher prices for consumers on everyday goods.
Lawmakers have said these taxes are necessary to address federal funding cuts from the Trump administration. They are hesitant to make their own budget cuts and are in the process of approving the largest state spending plan in history, totaling $355 billion.
The governor and lawmakers are expected to finalize the overall spending plan by the end of the month.
KCRA 3 Political Director Ashley Zavala reports in-depth coverage of top California politics and policy issues. She is also the host of “California Politics 360.” Get informed each Sunday at 8:30 a.m. on KCRA 3.
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