PALO ALTO, Calif. — It is getting awfully expensive to be a millionaire in California.
With the new year, big earners are confronting a 51.9 percent federal-state income tax hit on earnings over $1 million, the result of a confluence of new tax-the-rich levies imposed by California and Congress in the closing days of 2012. That is officially the highest in the nation. And at 13.3 percent, the top-tier California income tax is, in addition to being higher than any other state, the steepest it has been since World War II.
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dmitri • 15 hours ago Report Abuse
I live in California. Here is what the article does not tell you or does not explain why the taxes are so high.
1. The State is controlled by the public unions. They set the agenda and as of 1/1/2013 have taken complete control of the state government.
2. The state has the largest unfunded pension liability. Some very conservative estimates show half a trillion (yes you did not misread it) pension liability. The mass retirement wave is in the process of forming now.
3. Our state cannot declare bankruptcy. The only way out of the budget mess is to increase the taxes.
4. Several California legislators have not realized that the rich will be leaving the State. There is a good data out there that shows that the exodus has already began. That's why Florida looks so nice. At least one proposal out there is looking at so called exit tax. The tax would be an excise tax on the property domiciled in California. The proposal is looking at a 50% tax on assets upon exit from the state.
5. Train to nowhere. Governor Moonbeam passed the train to nowhere. The state will need at least 100 billion dollars in the next five years to make it happen. Every single estimate that was given to the taxpayers was a lie. Some project that this train will cost as much as 500 billion to complete not including annual cost of maintenance and many years of operating losses which no one know how it will be financed.
6. Prop 13. Some of the legislators are now talking about new property taxes. The unions have been pushing to kill prop 13 which will give the counties and the state ability to take even more money from the homeowners.
I can give you twenty more examples of what is wrong with the state but my humble conclusion is that we are screwed. Before you stop reading just think about one fact - California has 1/6 of the U.S. population. If you think your state is safe - think again. Your state will be California in the next five to ten years. It does not matter if you live in a blue or red state your state is controlled by the public unions.