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.
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.