A new report from the http://californiabudgetbites.org/2012/09/11/wealthiest-1-percent-would-provide-most-of-the-new-revenues-raised-by-proposition-30/">California Budget Project, a group that “works to improve public policies that affect low- and middle-income Californians,” suggests that the vast majority of the additional tax burden that would be placed on state residents should Proposition 30 pass would be absorbed by the state’s wealthiest one percent of residents.
The combination proposal to raise sales and income taxes is a hybrid of the so-called Millionaire’s Tax and a proposal by Governor Jerry Brown, whose backers joined forces to reduce new tax measures from three to two. A separate proposal, Proposition 38, focuses on income tax increases alone. Both focus the majority of new revenues on shoring up education spending statewide.
While residents in the first to 99th percentile of income in the state would see their taxes rise between $24-$168 if the proposition passes (mainly due to a 0.25% across-the-board temporary sales tax hike to last 7 years), the top 1% of earners, or those making more than $533,000 annually, could face an added tax burden of nearly $21,000, due to provisions raising state income taxes to 10.3% on incomes of $250,000 to $300,000, to 11.3% on incomes from $300,001 to $500,000, and to 12.3% on income over $500,000. Income tax rates on Californians making less than a quarter-million dollars annually would not be affected.
Overall, nearly 80 percent of the projected income generated by the new taxes the proposition seeks would come from the highest earners in the form of income tax hikes.
California Budget Project justifies its support for the measure through research that it says finds the top-earning one percent of Californians saw their incomes rise 82% between 1987 and today, while the bottom 80% of earners are bringing home smaller paychecks after inflation is considered.