Dan Walters
By Dan Walters
dwalters@sacbee.com
Published: Monday, Sep. 24, 2012 – 12:00 am | Page 3A
The centerpiece of Gov. Jerry Brown’s tax increase measure, Proposition 30, is a $5 billion a year boost in income taxes on about 150,000 high-income individuals and families – the 1 percenters who already pay 40 percent of California’s income taxes.
Their marginal income tax rate, now 9.3 percent, would increase by one, two or three percentage points for seven years.
For those with more than $1 million in taxable income, the top rate would hit 13.3 percent, including a 1 percent surcharge for mental health services imposed by voters in 2004. California would have – by a wide gap – the highest marginal income tax rate of any state.
“Tax the rich” obviously has popular appeal, as new polls reconfirm, which is why Brown and his union allies chose that path.
But how would those targeted for the increase react, should voters pass Proposition 30?
Would they simply pay up? Would they shelter more income from taxation – delaying stock sales and other transactions that create taxable capital gains, for example? Or would they change residences to a state with lower or no income taxes, such as Nevada?
Almost certainly, all of those and other options would be exercised should Proposition 30 pass. And that’s why predicting net revenue from such a hefty boost in marginal income tax rates is no more than an educated guess.
The notion that high- income residents would flee to other states has generated much debate as the Nov. 6 election nears.
Critics of the tax measure cite golfer Tiger Woods, who grew up in Southern California but relocated to Florida, which has no state income tax, as an example of how the rich have choices.
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One can only hope the rich go. I can think of no other way than to show these “need to pay your fair share” idiots that government expansion has got to stop but cutting off the funding. Dems will eventually have to show their true colors and tax the middle class to keep the entitlement streams flowing.
Think back to when we didn’t shell out the entitlements given today. State colleges where cheap, kids had extra curricular activities paid for, infrastructure got repaired, utilities were reasonable, Jobs were plentiful, we had all the government services we needed, California was a prosperous state and good place to live.
Now, you have to retire to another state just to get an advantage.
In this debate people forget that any extra state taxes that the “rich” pay to the State of California is deductible from their federal income taxes just like for all other Californians. So as one goes up, the other goes down and in the end it is probably a wash. That’s why you are NOT going to see a massive exodus of wealthy Silicon Valley, SF Bay Area, and Southern CA people elbowing each other to move to Mississippi, etc.
Besides, any true Californian “patriot” would rather pay more to CA then to the Feds even if it is wasted. At least the money will stay in CA rather than be sent to Washington for them to “redistribute” to our poorer sister states, aka “the taker” states, like Mississippi, North Carolina, Alabama, Kentucky, South Carolina, Montana, Louisiana, West Virginia, Tennessee, and Arkansas and many other Red States.
Keep it up Sacramento. It won’ be long before the only people left in our little socialist utopia are either filthy rich or government dependents. The middle class can’t afford to live here anymore and we’re all getting fed up and leaving.