California Proposition 30, Sales and Income Tax Increase (2012)

Temporary Taxes to Fund Education

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.

 

 

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