California Budget Project: Who Pays Taxes in California?
ITEP Work in ActionFormer Supreme Court Justice Oliver Wendell Holmes once noted that, “Taxes are what we pay for civilized society.” State and local taxes support our public schools, streets and highways, public hospitals that form the backbone of the state’s trauma care system, parks and beaches, the public health infrastructure that ensures that our food is safe to eat and our water is safe to drink (and that delivers water to homes across California), as well as a range of other services. While the primary purpose of a tax system is to raise the money needed to support public services, tax policy can also serve as an end in itself, providing incentives for taxpayers to engage in desired activities or providing cash assistance to certain individuals. Tax day – the day Californians are required to fi le their income tax returns – provides an opportunity to look at who pays taxes in California, who doesn’t, and how California’s tax systems compare to those of other states.