Gavin Newsom brain is fried by his hair gel. That can be the only excuse for his misrepresentations of taxes in California. Or maybe, he is just a typical Democrat liar?
“California has one of the heaviest tax burdens in the United States. According to the Tax Foundation, California has the third worst business tax climate in the nation. The corporate income tax is a flat rate of 8.84 percent. Owing to high taxes, many businesses have left the state, including major corporations like Chevron and Charles Schwab.
Individual income tax rates in California are the highest in the country, with a whopping marginal rate of 14.4 percent for individuals in the highest income bracket. To live “comfortably” in California, it is estimated that individuals need to make $89,190 per year. On such a salary, the marginal tax rate would be 9.3 percent, or roughly $5,000 in state income tax alone.
California has the highest state sales tax in the country, at 7.25 percent, about two percentage points above the national average of 5.1 percent. That percentage is often much higher in practice, though, because of additional local sales taxes. For example, the sales tax rate in Los Angeles County is 10.25 percent. Such a high rate puts immense pressure on consumers, especially low-income consumers, forcing them to spend an additional $10 for every $100 of purchases in many parts of the state.”
We also have the highest gas tax in the nation—all of this translate into California haven’t the most resident in poverty, by population and percentage.
Don’t believe Gavin Newsom. California is not a low-tax state.
By KRISTIAN FORS, Pasadena Star News, 7/15/24 https://www.pasadenastarnews.com/2024/07/15/dont-believe-gavin-newsom-california-is-not-a-low-tax-state/
In his “State of the State Address,” Gov. Gavin Newsom said, “California is not a high-tax state” when comparing the tax burden on low-income residents in California to those in Florida and Texas. But Newsom is not telling the whole story.
According to the Institute on Taxation and Economic Policy, low-income residents in Florida and Texas pay larger portions of their income in taxes than high-income residents pay in California. Newsom relied on those numbers. Nevertheless, identifying the shortcomings of other states does not transform California into a low tax state and ignores important realities.
California has one of the heaviest tax burdens in the United States. According to the Tax Foundation, California has the third worst business tax climate in the nation. The corporate income tax is a flat rate of 8.84 percent. Owing to high taxes, many businesses have left the state, including major corporations like Chevron and Charles Schwab.
Individual income tax rates in California are the highest in the country, with a whopping marginal rate of 14.4 percent for individuals in the highest income bracket. To live “comfortably” in California, it is estimated that individuals need to make $89,190 per year. On such a salary, the marginal tax rate would be 9.3 percent, or roughly $5,000 in state income tax alone.
California has the highest state sales tax in the country, at 7.25 percent, about two percentage points above the national average of 5.1 percent. That percentage is often much higher in practice, though, because of additional local sales taxes. For example, the sales tax rate in Los Angeles County is 10.25 percent. Such a high rate puts immense pressure on consumers, especially low-income consumers, forcing them to spend an additional $10 for every $100 of purchases in many parts of the state.
The Golden State is also home to the highest gasoline tax in the nation, which recently reached 69.8 cents per gallon at the beginning of the month. That is much higher than the national average of 32.5 cents per gallon. With the inclusion of the federal gas tax of 18.4 cents per gallon, the total tax burden on gasoline in California rises to 88.2 cents per gallon.
Sales and gas taxes tend to be regressive because low-income individuals spend larger fractions of their incomes on such taxes than high-income individuals. In fact, due to California’s high sales and excise taxes, low-income California residents would pay similar shares of their income in taxes as those in Florida and Texas if it were not for refundable tax credits available for such individuals in the California income tax code.
Studies estimate a shortfall of 2.5 million homes in California, which has led to the state having the second most expensive house prices in the country. Despite the fact that Texas has much higher property tax rates than California, new homebuyers in California still face a much greater tax obligation than their counterparts in Texas caused by sky-high property values in California.
All taxes contribute to California’s high cost of living, the third highest in the country. Property taxes, income taxes, sales taxes, excise taxes, government fees, plus hidden regulatory costs are baked into the price of everything. Low-income residents shoulder the heaviest burdens, which Newsom won’t tell you.
Gavin Newsom cherry picks statistics, but the overall cost of living does not lie: Low-income Californians are disadvantaged by the state’s high taxes, fees, and regulatory costs, many of which are hidden in the prices residents pay.
If California wants to attract and retain talent, it needs to reduce its overall cost of living. Otherwise, Californians remain free to “vote with their feet” by moving to states that offer them more attractive opportunities.
Kristian Fors is a policy analyst at the Independent Institute and a master’s student at the London School of Economics and Political Science.
