California legislators are breathing a little easier now that voters surprisingly, and through a solid majority, approved the governor’s tax hike, Prop. 30.
The new law will raise billions of dollars a year for most of the next decade to stem the state’s budget shortfall and protect education funding.
But who’s paying for Prop. 30?
Gov. Jerry Brown sold his proposal as a tax measure directed largely at the wealthy, and analysis shows the wealthy will be paying their fair share - and then some.
The taxing mechanisms of Prop. 30 are two-fold: a modest bump in the sales tax, from 7.25 to 7.5 percent, and a size able increase in the personal income tax for Californians with taxable incomes of $250,000 and higher for single filers, and $500,000 and more for joint filers.
Using those guidelines, NBC Bay Area calculated the additional costs of Prop 30 for the average taxpayer making $55,000 a year, for a single file taxpayer making a taxable income of $350,000, and a single file taxpayer making a taxable income of $1 million.
The average taxpayer making $55,000 will shell out an additional $55 a year, all through a higher sales tax.
That projection is based on research performed by the Institute on Taxation and Economic Policy, which found that middle-income taxpayers making between $37,000 and $96,000 a year will pay .1 percent of their income in higher taxes.
For someone with a taxable income of $350,000, the cost of Prop. 30 shoots up to $1,500 a year.
And for a person with taxable income of $1 million, the tax hike rises to $19,500.
In perhaps a more telling statistic, the wealthiest one percent of California taxpayers- those making $533,000 a year and more- will be paying almost 80 percent of the Prop. 30 revenues, based on a report from the Independent Congressional Budget Project.
Those individuals will see their tax increase, proportionately, as 1.1 percent of their total income.
That figure drops precipitously when compared to even Californians making $206,000 to $533,000, down to .05 percent.
Households with incomes between $22,000 and $206,000, will see an increase between .1 and .2 percent, as they are slightly more dependently on household goods than their highly affluent counterparts.