Assemblymember Dr. Jasmeet Bains Announces 'End California's Poverty Tax Act' to Eliminate Overtaxing of Working Families

• Adam Capper
• (916) 319-2035
• [email protected]

SACRAMENTO, CA - Assemblymember Dr. Jasmeet Bains today announced Assembly Bill 2591, the "End California's Poverty Tax Act," a measure designed to fundamentally reform how the state taxes its lowest-earning residents.

Under AB 2591, a working family of four earning $45,000 a year would pay no state income tax. By nearly quadrupling the current standard deduction and tying it to the Federal Poverty Level, AB 2591 would eliminate state income tax liability for an estimated 15 million working-class Californians struggling to survive the state's severe affordability crisis.

"This cost of living tax cut is long overdue," said Dr. Bains. "Thousands of families have worked hard to earn enough not to live in poverty, if only the state didn't tax them back into it. Washington and Sacramento are creating record gas prices with the highest gas tax in the country, and now they are talking about increasing the gas tax AGAIN. It's time for taxes on working Californians to go down, not up. The End California's Poverty Tax Act is about basic fairness. If you are barely making enough to keep a roof over your head and feed your children, the state should not be taking another bite out of your paycheck."

Under current tax law, California levies income taxes after an individual earns just $5,706 or a couple earns $11,412. Meanwhile, the cost of housing, groceries, and utilities has skyrocketed. By tying the standard deduction to 138% of the FPL, which is the same threshold used for Medi-Cal expansion, AB 2591 nearly quadruples the standard deduction and would eliminate state income taxes on roughly 15 million low-income residents. The impact on working families is undeniable:

• A single worker earning $22,000 a year currently only receives a $5,706 deduction, leaving over $16,000 subject to state taxation. Under AB 2591, their standard deduction increases to $22,025, wiping out their state income tax liability entirely.
  
• A single parent with one child earning $29,000 currently faces taxes on more than half of their income. This bill raises their deduction to $29,864, keeping those vital funds in their pocket.
  
• A family of four scraping by on $45,000 a year currently receives a standard deduction of $11,412, meaning the state taxes them on over $33,000 of their income despite their struggle to afford basic necessities. AB 2591 raises their standard deduction to $45,540.

"Every dollar the state takes from a family of four making $45,000 is a dollar taken from their grocery budget or their rent," Dr. Bains continued. "It makes absolutely no sense that California taxes our poorest residents. The state should be helping families escape poverty, not taxing them into it. We need to let working people keep the money they've earned."

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Dr. Jasmeet Bains represents the 35^th Assembly District in Kern County, including the cities of Bakersfield, Delano, Wasco, Arvin, Shafter, and McFarland.