In preparing the current 2012-13 General Fund budget, state lawmakers could not cover the cost of programs with estimated revenue. To create additional revenue, lawmakers passed this year’s budget with a plan of asking voters to approve temporary tax increases.
That plan is Prop 30. If voters do not approve Prop 30, then the budget has required “trigger cuts” of $6 billion, mainly to K-12 education, community colleges, and public universities.
Provisions of Proposition 30 include:
- Raises California’s sales tax to 7.5% from 7.25%, a 3.45% percentage increase over current law.
- Creates four high-income tax brackets for taxpayers with taxable incomes exceeding $250,000, $300,000, $500,000 and $1,000,000. This increased tax will be in effect for 7 years.
- Imposes a 10.3% tax rate on taxable income over $250,000 but less than $300,000--a percentage increase of 10.6% over current policy of 9.3%. The 10.3% income tax rate is currently only paid by taxpayers with over $1,000,000 in taxable income.
- Imposes an 11.3% tax rate on taxable income over $300,000 but less than $500,000--a percentage increase of 21.5% over current policy of 9.3%.
- Imposes a 12.3% tax rate on taxable income over $500,000 up to $1,000,000--a percentage increase of 32.26% over current policy of 9.3%.
- Imposes a 13.3% tax rate on taxable income over $1,000,000--a percentage increase of 29.13% over current "millionaires tax" policy of 10.3%.
- If this proposition is passed in November, 2012, the income tax will apply retroactively to all income earned or received since the first of the year (1 January, 2012).
- Based on California Franchise Tax Board data for 2009, the additional income tax is imposed on the top 3% of California taxpayers.
Those for Proposition 30 say (www.yesonprop30.com):
- Prop 30's taxes are temporary, balanced, and necessary for our state's students.
- Prop 30 is the only imitative which protests school and safety funding, and addresses the state's unending budget mess.
Those against Proposition say (www.stopprop30.com):
- Prop 30 has no assurances that tax increases will actually benefit classrooms.
- Politicians and special interests want to continue their out-of-control spending, but not make meaningful reforms.
Though there is a conflict with this measure, according to the Kern County Elections Department. Another measure on the ballot, Prop. 38, would increase personal income tax rates, but in a different way than Prop. 30.