California Budget Project: What Would Be the Impact of Reinstating the 10 and 11 Percent Personal Income Tax Rates?

One option for helping to bridge the state’s budget gap would be to reinstate the 10 percent and 11 percent tax rates for high-income Californians. Adding a 10 percent tax rate for married taxpayers with taxable incomes above $277,132 ($138,566 single) and an 11 percent rate for married taxpayers with taxable incomes exceeding $554,265 ($277,132 single) would raise $2.9 billion 2004-05, $2.4 billion in 2005-06, and $2.6 billion in 2006-07.1 The state’s current top income tax bracket of 9.3 percent applies to taxpayers with taxable incomes in excess of $39,133 (single) and $78,266(married).