The Sacramento Bee
Dec 6, 2012
Thanks to passage of Proposition 30 last month, high-income Californians would pay the nation’s highest marginal income tax rates — nearly 52 percent — if President Barack Obama and Congress fail to make a deal to avoid the so-called “fiscal cliff,” according to a new study.
Without a fiscal cliff deal to the contrary, the Bush era tax cuts on high-income taxpayers would expire next year and rates would return to their previous levels.
Gerald Prante, an economics professor at Lynchburg College in Virginia, and Austin John, a Lynchburg economics student, calculated marginal tax rates — the highest rates on the highest levels of income — for all 50 states. They combined state, federal and, where applicable, local income taxes, pluspayroll taxes for Social Security and Medicare and included the deductibility of some taxes.
Proposition 30 added three percentage points to the marginal state income tax rate for California’s highest-income taxpayers, bringing it to 13.3 percent. That action raised California over other high-tax jurisdictions to a marginal rate of 51.9 percent, slightly higher than New York City’s level. Hawaii was the only other place with a calculated rate above 50 percent.
Their report was published by the Social Science Research Network.
This article was posted: Thursday, December 6, 2012 at 5:48 am