Skip to comments.If U.S. hikes taxes, high-income Californians might pay almost 52 percent
Posted on 12/06/2012 10:47:06 AM PST by SeekAndFind
Whether it's because we end up going over the fiscal cliff or because Republicans agree to President Obama's plan of not extending the Bush tax cuts on America's wealthiest earners, the possibility of an effective tax hike means that higher-income Californians may be in for a whopping aggregate marginal tax rate. The super-liberal state already succeeded in approving their own rate hike with Proposition 30 in the November election, and combined with the potential federal raises, they could be looking at a top bracket with a marginal income tax rate of just under 52 percent:
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, plus payroll 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.
…Ouch. We already knew that California was headed for a fall, but here’s yet another problem with top-down government and specifically with President Obama’s proposals to hike taxes across-the-board on those he deems wealthy, i.e. families making more than $250k/year. As Joel Kotkin writes for Forbes, it’s kind of odd that blue states voted so overwhelmingly against their own self-interest in reelecting Barack Obama, because the tax hikes he campaigned on will come down disproportionately hard on the economies of blue states. The demographics and costs of living in different geographic regions suggests that being rich means very different things to different regions:
Any move to raise taxes on the rich defined as households making over $250,000 annually strikes directly at the economies of these states, which depend heavily on the earnings of high-income professionals, entrepreneurs and technical workers. In fact, when you examine which states, and metropolitan areas, have the highest concentrations of such people, it turns out they are overwhelmingly located in the bluest states and regions.
The people whose wallets will be drained in the new war on the rich are high-earning, but hardly plutocratic professionals like engineers, doctors, lawyers, small business owners and the like.
What would a big tax increase on the rich mean to the poor and working classes in these areas? To be sure, they may gain via taxpayer-funded transfer payments, but its doubtful that higher taxes will make their prospects for escaping poverty much brighter. For the most part, the economies of the key blue regions are very dependent on the earnings of the mass affluent class, and their spending is critical to overall growth. Singling out the affluent may also reduce the discretionary spending that drives employment in the personal services sector, retail and in such key fields as construction.
If Boehner had any spine whatsoever, he should propose a monster revenue-enhancing idea: Repeal the State Income Tax Deduction. They voted for Il Douche, they can pay for him!
What percentage goes to taxes when you add in sales tax, gas tax, occupancy taxes, and hidden taxes on phone bills, air tickets, etc.? Seems to me the “rich” are simply vassals of the Crown, and the noblesse oblige is costing a heck of a lot more than Prince John would have ever dreamed of exacting.
Bonehead is part of the DC Party, which means he has no spine.
Yep... "D.C." as in "Don't Contend."
California liberals own him. Maybe he should tax hollywood at 90%. They can afford it.
...no give a damn...
They deserve it.
They asked for it, when they backed him.
The GOP should have made a LOT of things (voter/election fraud, illegal immigration, tax reform) a priority when they had all three branches under GWB. The question you have to ask yourself is....why didn’t they? When or if you get that answer, you will know why we’re in the disaster we’re in....and how it’s only going to get worse from here on.
As far as I’m concerned....government and our elected officials have failed the producers in America on every level except that of national security (no nuclear attacks yet), thus far. But that failure is also looming....large.
“Pubs should have made that a top priority last time they controlled the whole shebang.”
and how can we calculate the price of items that goes to pay corporate tax?