Politics

California Weighing Proposal That Could Double Its Taxes

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California lawmakers unveiled a new bill at the beginning of the year that would establish a single-payer health care system – an ambitious plan that would be funded by nearly doubling the state’s already-high taxes.

A new analysis from the Tax Foundation, a non-partisan group that generally advocates for lower taxes, found that the proposed constitutional amendment would increase taxes by roughly $12,250 per household in order to fund the first-of-its-kind health care system. In all, the tax increases are designed to raise an additional $163 billion per year, which is more than California raised in total tax revenue any year before the pandemic.

The proposal includes three main revenue raisers, according to Jared Walczak, a fellow at the Tax Foundation: Higher income taxes on wealthy Americans, a payroll tax on certain employees’ wages for large companies, and a new gross receipts tax.

Under the bill, the top marginal rate on wage income would soar to 18.05% – well above the median top marginal rate of 5.3% and the state’s existing rate of 12.3%. There would be an 18-bracket system, with higher taxes kicking in for individuals earning more than $149,509. The highest rate would apply to those who earn more than $2,484,121.

Here’s a closer look at how the tax system would be structured, based on individual income:

* 13.05%: N/A (for married couples, this applies to income of $599,013)

* 14.05%: N/A (for married couples, this applies to income of $625,371)

California would also expand the pa… (Read more)

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