California Democrats Propose Raising Top State Tax Rate to 16.8%

economic adjustment

California Democrats are planning to raise the state’s highest-in-the-nation tax rates even higher this month, hiking the top rate in the state to 16.8%.

The San Francisco Chronicle reported Friday:

A bill introduced in the Legislature this week would raise California’s top personal income tax rate — already the highest in the nation at 13.3% — to 16.8%, retroactively to Jan. 1.

To take effect this year, the bill would need to be approved by two-thirds of the Legislature before they adjourn Aug. 31. The Senate Governance and Finance committee will hear testimony on the bill Monday morning, but won’t vote on it. It would need additional action to move forward.

AB1253 would add a surcharge of 1% to incomes (joint or single) between roughly $1 million and $2 million, 3% on income between $2 million and $5 million, and 3.5% on income greater than $5 million, bringing the top rate to 16.8%. (The tax would actually take effect at somewhat higher incomes because of inflation adjustments.)

The funds to be raised would not be earmarked for any specific purpose, but sponsor State Sen. David Chiu (D-San Francisco) said that the money could be used for “affordable housing, the homeless, child care and education,” the Chronicle reported.

The state raised taxes on the wealthy to 13.3% in Proposition 30, which was sold by then-Gov. Jerry Brown to voters as being “temporary,” and necessary for education funding. Democrats extended those “temporary” taxes to 2030 with a ballot referendum, Proposition 55.

The effects of the income tax hike were missed. Some high-income earners left the state, though not as many as critics predicted. Businesses continued to leave the state, but that was also the result of other factors, particularly the state’s regulatory environment.

Democrats also raised gas taxes in 2017, defeating an effort to overturn the tax increase with Proposition 6 in 2018, which state Attorney General Xavier Becerra slapped with a deceptive ballot description that helped ensure the gas tax remained.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). His new book, RED NOVEMBER, tells the story of the 2020 Democratic presidential primary from a conservative perspective. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.


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