AMERICAN REPUBLIC RADIO

In addition to soaking its rich, California imposes a 6% top marginal income tax rate on individuals

By Katy Grimes, December 18, 2023 8:10 am

Even as California faces a record $68 billion budget deficit – after blowing a supposed $100 billion surplus last year – Gov. Gavin Newsom continues to lie about the state’s income taxes, claiming that they are not the highest in the country.

Notably, the $68 billion budget deficit does not include the state’s more than $1 trillion unfunded pension and health care liability for its retired government employees, or the massive debt California owes to the federal government for the EDD unemployment fraud during the COVID pandemic.

Not only are new taxes being imposed on January 1, 2024 to cover Newsom’s and Democrats’ deficit spending, Newsom claims that Florida “taxes low-income workers more than we tax millionaires and billionaires in the state of California.”

The Wall Street Journal cut to the chase and responded:

“How’s that possible when California imposes higher income, sales and gasoline taxes than Florida? California’s gas tax is 77.9 cents a gallon compared to 35.2 cents in Florida. The average state-and-local sales tax rate in California is 8.85% versus 7.02% in Florida.

In addition to soaking its rich, California imposes a 6% top marginal income tax rate on individuals earnings more than $37,789 and 9.3% over $66,296. Florida has no income tax.”

California’s overall tax burden on middle – and lower-income folks is higher than Florida’s.

Here is the Tax Foundation’s proof, state by state:

When pressed, Newsom’s office said he was referring to a 2018 study by the leftwing Institute on Taxation and Economic Policy, “which says the top 1% of Californians paid 12.4% of their income in state and local taxes while the bottom 20% of earners in Florida paid 12.7%. But this statistical artifact owes to the wealthy spending relatively less of their income than lower-earners. That means California’s high earners aren’t walloped as much by the state’s high gasoline and sales taxes.”

Gov. Gavin Newsom also claims that “95% of Texans pay higher taxes than Californians.”

And again, Newsom’s office used the 2018 study by the Institute on Taxation and Economic Policy.

2018? Really? Newsom could not be more disingenuous – it is bold dishonesty and he and his staff know it.

Newsom made this absurd claim in January at a budget news conference, and has repeated it many times. “Our tax rates, again, are lower than the state of Texas,” the governor said. “I just want to remind everybody out there, 95% of Texans pay higher taxes than Californians.” Newsom noted that while the state’s tax rates on the very wealthy are among the nation’s highest, “not everybody lives in that rarified world.” LESS INCOME, LESS TAX The ITEP report found California had the nation’s most equitable tax system, and it cited Texas as the second most unfair, after Washington, the SacBee reported.

The Tax Foundation breaks down California’s actual income tax structure:

California has a graduated state individual income tax, with rates ranging from 1.00 percent to 13.30 percent.
California has a 8.84 percent corporate income tax rate.
California has a 7.25 percent state sales tax rate, a max local sales tax rate of 2.50 percent, and an average combined state and local sales tax rate of 8.82 percent.
California’s tax system ranks 48th overall on our 2024 State Business Tax Climate Index.

The Tax Foundation compares all 50 states on over 40 measures of tax rates, collections, burdens, and more, and reports in its State Tax Collections per Capita, California is number #2, and in its State Individual Income Tax Collections per Capita, California is number #1. They also note that Florida and Texas have no individual income tax, along with Washington state, South Dakota, Wyoming, Tennessee, New Hampshire and Alaska.

In their 2024 State Business Tax Climate:

**The 10 lowest-ranked, or worst, states in this year’s Index are:**

Here’s why: “The states in the bottom 10 tend to have a number of afflictions in common: complex, nonneutral taxes with comparatively high rates. New Jersey, for example, is hampered by some of the highest property tax burdens in the country, has the highest-rate corporate income taxes in the country, and has one of the highest-rate individual income taxes. Additionally, the state has a particularly aggressive treatment of international income, levies an inheritance tax, and maintains some of the nation’s worst-structured individual income taxes.”

**The 10 best states in this year’s Index are:**

Here’s why: “The absence of a major tax is a common factor among many of the top 10 states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax. Nevada, South Dakota, and Wyoming have no corporate or individual income tax (though Nevada imposes gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax.”

Since the 2018 report by the leftwing Institute on Taxation and Economic Policy, they have done numerous other reports on California including these doozies:

Katy Grimes, the Editor in Chief of the California Globe, is a long-time Investigative Journalist covering the California State Capitol, and the co-author of California’s War Against Donald Trump: Who Wins? Who Loses?