{"id":7447,"date":"2026-06-17T15:32:34","date_gmt":"2026-06-17T15:32:34","guid":{"rendered":"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/06\/17\/assembly-democrats-unite-to-tax-software-health-plans-in-revenue-raising-package-2\/"},"modified":"2026-06-17T15:32:34","modified_gmt":"2026-06-17T15:32:34","slug":"assembly-democrats-unite-to-tax-software-health-plans-in-revenue-raising-package-2","status":"publish","type":"post","link":"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/06\/17\/assembly-democrats-unite-to-tax-software-health-plans-in-revenue-raising-package-2\/","title":{"rendered":"Assembly Democrats unite to tax software, health plans in revenue-raising package"},"content":{"rendered":"<article><!-- --><!-- --><!-- WPS-5038 -- removed the script from WPS and added the placeholder for trinity player --><!-- --><!-- --><!-- --><!-- --><!-- --><!-- --><!-- --><!-- CONTENT --><!--[--><!--[--><\/p>\n<p>The California Assembly easily passed bills to increase taxes on software programs and health insurance premiums and extended a cap on corporate tax credits Monday, with the Democrat supermajority muscling in unity past Republican outrage during a late night debate.<\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/06\/17\/democrat-pan-frames-newly-independent-kiley-as-trump-aligned-in-6th-district-race-2\/\">Democrat Pan frames newly Independent Kiley as Trump-aligned in 6th District race<\/a><\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Gov. Gavin Newsom first proposed the revenue raising measures in his May budget. Democratic leadership in the Legislature adopted them in an agreement announced last week. The California Senate is likely to echo the Assembly\u2019s performance Thursday, leaving little space for industry lobbyists and other opponents to knock down the tax increases.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The bills, which could raise more than $3 billion in the coming fiscal year, are part of a budget package Democratic leaders say shores up the state\u2019s social safety networks in the face of slashing cuts from President Donald Trump and the Republican-dominated U.S. Congress.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>In the state Assembly, where Republicans hold 19 votes in the 80 member body, that party\u2019s representatives accused California Democrats of abandoning their pledges to address the state\u2019s cost-of-living issues.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cCalifornians are demanding relief right now, and what we are giving them are more taxes and more affordability,\u201d said Assemblymember David Tangipa, R-Fresno. \u201cAnd in a state that likes to claim that we are the richest state in the richest country in the history of the world, we still have an insatiable appetite for everybody else\u2019s assets.\u201d<\/p>\n<p><!--]--><!--[--><\/p>\n<p>Democrats also quickly dispatched with a Republican attempt Monday to suspend that tax, with several lawmakers from the majority party noting policies from President Donald Trump such as tariffs and the war in Iran had driven up inflation and gasoline prices.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The budget does not raise the state\u2019s gas tax, but that tax is <u>set to increase by 2 cents a gallon<\/u> next month under laws that require adjustments tied to inflation rates.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<h2>Close a federal funding gap by taxing health insurers<\/h2>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>But the budget deal is likely to increase monthly premiums for people with private health insurance. That\u2019s because one of the most controversial tax proposals <u>is a significant increase to the taxes paid by managed care organizations<\/u> \u2014 the health insurers responsible for most commercial health plans.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>Opponents of that measure estimate that tax could raise people\u2019s premiums by as much as $100 a year for an individual or $400 a year for a family of four.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The measure drew fire from at least one moderate Democrat \u2014 Assemblymember Jasmeet Bains, D-Bakersfield, who recently lost a primary election to run for Congress. Bains, who often clashes with her caucus, accused California Democrats of having \u201clost the plot.\u201d<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The tax on healthcare plans was not \u201ca progressive solution,\u201d she said. \u201cIt is a cruel, regressive maneuver that mirrors the wort of Donald Trump\u2019s attacks on healthcare.\u201d<\/p>\n<p><!--]--><!--[--><\/p>\n<p>The federal government left the Legislature little choice but to raise the tax on managed care organizations, Assembly Budget Chair Jesse Gabriel, D-Encinitas, said. Republicans changed federal law to require an equal tax on private and public health insurance plans, negating a roundabout way California had used a tax on Medi-Cal plans to get more money from the federal government.<\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/06\/17\/messi-makes-history-gets-hat-trick-for-argentina-in-3-0-world-cup-win-vs-algeria\/\">Messi makes history, gets hat trick for Argentina in 3-0 World Cup win vs. Algeria<\/a><\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The state stood to lose out on billions more in federal funding, on top of all the other cuts in Republican\u2019s federal budget, if elected officials didn\u2019t raise the tax on private plans. The Legislature\u2019s spending package, which Democrats passed earlier Monday night, includes money for hospitals imperiled by Trump\u2019s cuts, <u>as well as $300 million to subsidize Medicare premiums set to spike<\/u> under a loss of federal subsidies.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cWe are doing everything possible to protect health care for Californians, to make health care more affordable,\u201d Gabriel said. \u201cThat\u2019s why we\u2019re working so hard to provide that premium support, we\u2019re working so hard to protect our health care safety net. And in order to do that work, we need to pass this budget.\u201d<\/p>\n<p><!--]--><!--[--><\/p>\n<p>But ahead of Monday\u2019s vote, even some health access advocates who supported the tax increase noted <u>there were likely other ways<\/u> for the Legislature to raise the money without hiking private insurance premiums.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>They pointed to two progressive proposals to raise money off corporations \u2014 one a change to how offshore companies are taxed and the other the imposition of a fee on companies whose employees rely on Medi-Cal for health coverage \u2014 that did not make the budget compromise.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The budget deal does include a measure requiring state agencies to study how many companies leave their employees to receive health coverage through Medi-Cal. But lawmakers have yet to vote on that measure, which is a legislative proposal that Newsom has yet to weigh in on.<\/p>\n<p><!--]--><!--[--><\/p>\n<h2>Software sales tax, cap on corporate tax credit<\/h2>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>In addition to the health insurance premium tax, the Assembly passed a measure to extend the state\u2019s sales tax to software programs based on the cloud. Lawmakers also advanced a cap on a corporate tax credit designed to spur research and development. By 2029, removing that tax credit is supposed to raise the state as much as $4.5 billion a year.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Opposition to that measure is particularly fierce in the technology and biotech sectors. Advocates say tax breaks for research allow for the kind of expensive bets on innovation that have long driven California\u2019s dynamic economy.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Removing the credit \u201cinflicts lasting harm on the biotech sector and undermines one of the state\u2019s greatest engines of innovation and economic growth,\u201d said Sam Chung, a spokesperson for California Life Sciences, which represents pharmaceutical companies, medical technology companies and research centers, in a statement ahead of the Assembly vote.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>Lobbyists for various trade associations have been working hard to kill or blunt the tax increase \u2014 but they\u2019ve had little time to do so. Newsom unveiled the proposal in his May budget revision and lawmakers adopted it last week. With Democrat leaders all seemingly on board, the proposals have drawn support even from moderate lawmakers who initially appeared reluctant to increase any taxes this year. Bains was the only Democrat to vote against the tax measures Monday night.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>On the floor, some lawmakers tied the tax credit to the nation\u2019s rising wealth inequality and the fabulous wealth of tech billionaires.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The statute change \u201cis so needed, not just in the entire architecture of a very carefully crafted budget,\u201d said progressive Assemblymember Alex Lee, D-Milpitas, \u201cbut also to finally bring tax justice for all Californians and rein in the excess of greed, of corporations.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/06\/17\/person-of-interest-detained-in-north-sacramento-teen-homicide-investigation\/\">Person of interest detained in North Sacramento teen homicide investigation<\/a><\/p>\n<p><!--]--><!--]--><!-- --><!-- --><!-- --><!-- --><\/article>\n","protected":false},"excerpt":{"rendered":"<p>Democratic leaders in the California Legislature advanced taxes on health plans and software while capping a corporate R&amp;D credit to fund safety net programs.<\/p>\n","protected":false},"author":1,"featured_media":7426,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7447","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-capitol-alert"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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