(Washington, DC) – Congressman Doug LaMalfa (R-Richvale) and Republican Leader Kevin McCarthy (R-Bakersfield) led every California Republican Member of Congress in sending a letter to Speaker Pelosi to ask for a quick vote on reforms to the $1.9 trillion American Rescue Act. The bill, passed with only Democrat support, included a provision that prevents states from reducing fees and taxes if they receive stimulus funds. Governor Newsom and Democrats in the California Legislature failed to correct a law that taxes forgiven PPP loans as profit before the ARA passed. In order for the loans to be forgiven PPP loan funds must be spent on employee salaries, rent, and utilities. California’s struggling small businesses are now facing large, unexpected tax bills. The new law Biden and Pelosi passed now forbids California from fixing the tax problem. The ARA passed with no Republican votes and no Republican amendments were included in the House of Representatives to improve the bill. It is the most expensive bill ever passed on a purely partisan vote.
Rep. LaMalfa said, “California’s shut down policies have already harmed struggling small businesses. Congress stepped in with forgivable loans if funds were spent on salaries, rent and utilities to keep people employed and small businesses afloat. California is alone in taxing the aid Congress provided. Small businesses are being hit with thousands of dollars extra in taxes under California’s punishing business taxes. Now that Gov. Newsom has awoken to a problem that other states fixed months ago, Speaker Pelosi has passed a bill preventing California from reducing its insanely high tax burden. Every California Republican Member of Congress joined me in calling on Speaker Pelosi to repeal the legal ban on tax cuts. Her policy, combined with Governor Newsom’s inaction, is crushing small business in our state.”
Rep. Kevin McCarthy said, “California small business owners are yet another victim of Speaker Pelosi and Democrats’ refusal to collaborate with Republicans on common-sense issues that affect everyday Americans. During one of the most challenging times in our Nation’s history, the Democrat majority should have worked with Republicans to ensure that small businesses across America have the relief they need, especially after they were forced to shut down because of government mandates. To ensure small businesses, already struggling due to the pandemic, are not saddled with new tax liabilities, Congressman LaMalfa, our California Republican colleagues, and I demand that the Let States Cut Taxes Act, legislation that would repeal provisions that have created this troubling situation for California businesses, be immediately considered on the House Floor.”
Rep. Ken Calvert said, “California small businesses and their employees have suffered greatly under Gov. Newsom’s lockdown orders. Now when some relief may finally arrive from the state, Speaker Pelosi’s rushed and unfocused ‘stimulus’ bill may pull the rug out from under small businesses once again. This level of incompetence by Democrats in Sacramento and in D.C. would be shocking if it wasn’t such a regular occurrence.”
Rep. Mike Garcia said, “We must provide the necessary assistance to California’s small businesses that have suffered from state-mandated lockdowns. The partisan rush to pass the American Rescue Plan Act without considering Republican’s concerns has resulted in a law that has left far too many California small business owners in limbo. I’m grateful to Representative LaMalfa and Republican Leader McCarthy for spearheading this effort to help our small businesses and correct the issue created by the American Rescue Plan Act and AB 80. I will continue to fight to ensure that our small businesses have the resources necessary to recover and rebuild after a year of closure.”
Rep. Michelle Steel said, “This harmful provision in the American Rescue Plan is yet another obstacle for California small businesses and the workers they employ. The law is preventing small businesses that are struggling due to COVID-19 from receiving much needed tax relief, and many are now confused by conflicting policies from the federal government and the state. Congress should immediately pass the Let States Cut Taxes Act to repeal this unconstitutional and misguided policy that is only hurting our small businesses at a time when they need our support.”
Congressman Doug LaMalfa is a lifelong farmer representing California’s First Congressional District, including Butte, Glenn, Lassen, Modoc, Nevada, Placer, Plumas, Shasta, Sierra, Siskiyou and Tehama Counties.