Contact: Ron Roach (916) 441-0490
May 15, 1996
Of Californians' total income, 35.5% goes for federal, state and local taxes, fees and assessments.
And, for the first time, fees and assessments have become the biggest component of the state and local burden of financing government and its programs.
This insight is from "Taxing California," the California Taxpayers' Association's in-depth analysis of comparative tax burden.
Californians also continue to shoulder one of the heaviest tax-and-fee burdens in an apples-to-apples comparison of the high-income states, according to latest federal data for fiscal year 1992-93.
The state's taxpayers, with taxes, fees and assessments tallied as a percentage of personal income, ranked 23rd among the states. Advocates for higher taxes and more government spending jump on this figure. They say Californians' tax loads are only about average.
Taking a more realistic look, California has the third-highest tax burden among the richest states in personal income. California ranks well above New Jersey and Connecticut, two states that passed significant tax cuts in 1995. Of high-income states, Massachusetts, Maryland, Nevada, New Hampshire and Illinois are lower than California in tax burden.
Only New York and Hawaii, among high-income states, impose higher taxes and fees than California, and New York this year is feeling the impact of the largest net business tax reduction of any state. (Alaska ranks first, but is excluded from this list because of its unique sources of revenue, loading most of its tax burden on oil companies while residents pay little in taxes. Hawaii ranks second, but focuses much of its tax burden on tourists.)
State and local fees and assessments, which skyrocketed in the wake of restrictions on property tax increases over the past 18 years, account for 22% of the burden, slightly more than property taxes.
Californians pay way above the national average (13.5% more) in per capita taxes, and in per worker taxes (17.8% more). The state per worker burden is 20% above the national average on personal income taxes. For corporate income taxes, California soars to 127% above the national average per worker.
The only real plus in the California tax burden scenarios are property taxes, where in per worker measurement, California is only 0.8% above average.
When all levies, fees and assessments, including surrogates for taxes, are added up, the total takes up more than one-third of income. By any yardstick, that is a heavy load that impacts California's competitiveness with other states for job-producing industries.
(For further information, including copies of Mr. Kroes' research bulletin "Taxing California," contact Cal-Tax at 916-441-0490. Note that Cal-Tax in the past has produced research bulletins called "Taxing and Spending." This year, taxing and spending are divided into two bulletins. The bulletin on spending is scheduled to be released on June 1. It has been 18 months since the last Taxing and Spending bulletin because the federal government has taken longer to produce necessary state-by-state data. -- Ron Roach, communications director.)