News & Links/ California Proposition 30

Proposition 30, a Sales and Income Tax Increase Initiative

 

November 6, 2012 ballot in California Provisions include:

  • Raises California’s sales tax to 7.5% from 7.25%
  • Creates four high-income tax brackets for taxpayers with taxable incomes exceeding $250,000, $300,000, $500,000 and $1,000,000. This increased tax will be in effect for 7 years.
  • Imposes a 10.3% tax rate on taxable income over $250,000 but less than $300,000
  • Imposes an 11.3% tax rate on taxable income over $300,000 but less than $500,000
  • Imposes a 12.3% tax rate on taxable income over $500,000 up to $1,000,000
  • Imposes a 13.3% tax rate on taxable income over $1,000,000
  • If this proposition is passed in November, 2012, the income tax will apply retroactively to all income earned or received since the first of the year (1 January, 2012).

The 10.3% income tax rate is currently only paid by taxpayers with over $1,000,000 in taxable income

Estimated revenue from Proposition 30 varies from Jerry Brown's $9 billion estimate to the $6.8 billion estimated by the non-partisan Legislative Analyst’s Office (LAO).  The difference stem for the volatility caused by capital gains income from high-income earners, an issue in California's tax system previously identified by the Legislative Analyst’s Office (LAO).