Companies may have to rethink their plans regarding their business operations in California as the state plans to pass an order to charge head tax for large companies operating in the state. It means that the state's unemployment problems may worsen as some big companies operating in the state may postpone or pull-out their plans on setting shops and stores in California. Also, this means that potential employment opportunities for the state's unemployed population may decrease if the new law on head tax gets passed. 

Currently, almost 25% of the state's population is left without any jobs after the stay-at-home orders had affected the postponement of many businesses in the state that were deemed non-essential. It means that 25 % of California's total residents need jobs and they will not get that many opportunities during job hunting if large businesses will be rethinking of establishing branches or shops in the state due to the imposition of the head tax if it gets approved. 

About The Proposed Head Tax

The proposal includes asking tax payments from large companies doing business in different parts of the state, according to an article. Furthermore, the proposed tax is said to be charged to big businesses that employ more than 500 employees that are working in any part of California. Moreover, the proposal states that these businesses will be asked to pay a tax of $275 per employee. 

Similarly, Seattle formerly proposed a similar tax a few years ago. However, due to many parties expressed their disagreement with the implementation of the proposal, it was scrapped and had not taken into effect. 

If It Gets Approved

Based on an article, if the proposed tax gets approved, California will be the sole state in the United States of America to impose a head tax in the country. It means that it will become the only state in the country to charge tax to large businesses for employing more than 500 employees. With the huge number of unemployed individuals in the country brought by the coronavirus pandemic, this head tax may not help significantly reduce the unemployment rate in the state. 

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The Big Companies

According to an article, Amazon points out the alarming unemployment numbers in California and that the proposed head tax across the state can make it worse. Elon Musk's Tesla plant may also be moving its headquarters after a dispute with local authorities during the stay-at-home orders across the state. 

Plantir Technologies, the company of Peter Thiel and Alex Karp, may also move to a different state. The closing and relocation of many large businesses in the state may mean that the job opportunities they would have offered for the residents of the state will be inexistent. It means that there may be some job hunters who will be left with no choice but to move to a different state to look for work.