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California Faces $16 Billion Tax Revenue Shortfall Due to Trump Tariffs
California Faces $16 Billion Tax Revenue Shortfall Due to Trump Tariffs
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Governor Gavin Newsom’s administration projects a $16 billion decline in California’s tax revenue for the upcoming fiscal year, directly attributing the shortfall to President Trump’s tariff policies. The finance team’s memo cites a 4% drop from previous forecasts, driven by weakened equity markets following the April 2 tariff announcement.
Capital gains taxes account for the majority of the projected losses ($10 billion), with corporate taxes ($2.5 billion) and personal income taxes ($3.5 billion) comprising the remainder. The Ripple effects of trade policy have created measurable fiscal consequences at the state level, with California’s budget serving as an early indicator of macroeconomic strain.
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