‘We can do a lot’: Lawmakers turn to tax policy to challenge immigration enforcement

Privately owned detention center operators like GEO Group and Core Civic have reported record-high revenues since the beginning of President Donald Trump’s second administration. A few of the Assembly bills the Senate is set to hear soon would ensure these companies and other big corporations pay their fair share of taxes and don’t receive any taxpayer money.

Brought together by We Are California (WRCA), a coalition of workers, advocates, faith leaders and lawmakers convened on Wednesday to call on the Senate and the governor to pass three bills dealing with taxes and immigration enforcement. They say the legislation could help generate billions in revenue for the state and send a clear message to the Trump administration.

“I’ve heard over and over that California can’t do a lot when it comes to the federal government and what they’re doing to our community, to our mothers, to our children,” Assemblymember Liz Ortega (D-East Bay) said to the crowd Wednesday. “But AB 2465 flips the script and says, ‘actually, we can. We can do a lot and we can do it with our tax dollars.’”

Ortega’s bill would make it so that no state dollars, including tax credits and state grants, are directed to any corporations that contract with the federal government for immigration enforcement purposes. 

The bill would also create a Due Process for All Fund that would direct the California state Controller to transfer the total amount of tax collected from those same corporations to be used by the Legislature for “immigration-related services and programs.” AB 2465 requires a two-thirds vote in the Senate to pass before it heads to Gov. Gavin Newsom’s desk.

“I hope that [Newsom] will see this as another extension of what he’s told our community and has said that he’s going to have our back and is going to do everything in his power to fight back against this regime,” Ortega told CALÓ News.

Another tax bill, AB 1633, would impose a yearly 50% gross tax on all private detention facility operators in the state. The tax would potentially result in billions of extra tax revenue for the state and would also pour money into the Due Process for All Fund.

“This bill does not regulate federal immigration policy, instead it uses California's long-standing taxing authority to assess business activity taking place in our state,” said bill author and Assemblymember Matt Haney (D-San Francisco) during a May 27 Assembly floor session. “AB 1633 is about accountability, protecting California communities and ensuring laws do not reward private profiteering from human separation and suffering.”

Though it doesn’t deal with immigration enforcement, AB 1790, a bill aimed at closing California’s largest corporate tax loophole, has received support from WRCA, SEIU California and other advocacy groups.

In 1986, the California Legislature passed the water’s edge election, a tax policy the state still follows today. The policy allows multinational corporations to minimize what they pay in taxes by shifting some of their operations to tax havens like the Cayman Islands, making it look on paper like they are taking in less money than they really are. 

The loophole cost California just over $4 billion in 2024-25, according to the Department of Finance.

After scrutiny from business groups and international players, AB 1790 stalled in the Assembly Appropriations Committee last month. The bill author, Assemblymember Damon Conolly (D-Marin), said he is still committed to closing the loophole.

“It is time we stop the rigging of California’s tax system by corporate interests. It is time we stop letting corporations pick and choose how little they are taxed,” Connolly said Wednesday. “It is time to repeal water’s edge and even the playing field for all of California.”