October 17, 2018

California: Who Pays? 6th Edition

CALIFORNIA

CALIFORNIA STATE AND LOCAL TAXES

Taxes as Share of Family Income

					Top 20%
Income Group	Lowest 20%	Second 20%	Middle 20%	Fourth 20%	Next 15%	Next 4%	Top 1%
Income Range	Less than $23,200	$23,200 to $39,100	$39,100 to $62,300	$62,300 to $112,900	$112,900 to $261,300	$261,300 to $714,400	over $714,400
Average Income	$14,300	$31,000	$49,200	$83,500	$163,600	$399,700	$2,158,300
Sales & Excise Taxes	7.2%	6.1%	4.6%	3.5%	2.5%	1.6%	0.8%
General Sales – Individuals	3.1%	2.8%	2.2%	1.8%	1.4%	0.9%	0.4%
Other Sales & Excise – Ind.	1.6%	1.1%	0.7%	0.5%	0.3%	0.2%	0.1%
Sales & Excise on Business	2.6%	2.1%	1.6%	1.2%	0.8%	0.5%	0.3%
Property Taxes	4.0%	2.8%	2.5%	3.1%	3.0%	2.6%	1.5%
Home, Rent, Car – Ind.	3.9%	2.7%	2.5%	3.0%	2.8%	2.2%	0.5%
Other Property Taxes	0.0%	0.0%	0.1%	0.1%	0.2%	0.4%	1.0%
Income Taxes	-0.7%	0.6%	1.2%	2.4%	3.9%	5.7%	10.0%
Personal Income Tax	-0.7%	0.5%	1.2%	2.3%	3.8%	5.6%	9.8%
Corporate Income Tax	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.3%
TOTAL TAXES	10.5%	9.4%	8.3%	9.0%	9.4%	9.9%	12.4%

Individual figures may not sum to totals due to rounding. Download the table

TAX FEATURES DRIVING THE DATA in California

Progressive Features	Regressive Features
Graduated personal income tax structure Provides personal income tax credits in place of personal and dependent exemptions Limits itemized deductions for upper-income taxpayers Sales tax base excludes groceries Requires the use of combined reporting for the corporate income tax Provides a refundable Earned Income Tax Credit (EITC)	Comparatively high combined state and local sales tax rate Comparatively high cigarette tax Fails to provide a property tax “circuit breaker” credit for low-income, non-elderly taxpayers Does not levy a tax on estates or inheritances

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, California’s state and local tax system does not worsen income inequality and ranks 51st on the index. The large income gap between lower- and middle-income taxpayers, as compared to the wealthy, is somewhat narrower after state and local taxes than before. (See Appendix B for state-by-state rankings and the methodology for additional detail on the index.)

Note: Figures show permanent law in California enacted through September 10, 2018, at 2015 income levels. Personal income tax rates and brackets reflect law in effect through 2030. Top figure represents total state and local taxes as a share of non-elderly income. The sixth edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.