Are you overtaxed living in California?
Whether or not someone feels “overtaxed” in California is subjective and depends on individual circumstances and perspectives
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However, some data and observations about California’s tax system that could contribute to this feeling include:
High Income Tax Rates:
California has the highest marginal income tax rate in the nation, topping out at 13.3% on income over $1 million.
Even for lower earners, the progressive tax system means a portion of their income is subject to rates as high as 12.3%.
Some sources suggest that California’s income tax burden is higher than the average of both all other states and other western and industrial states.
Sales Tax:
California has a base sales tax rate of 7.25%, which is the highest in the country, and the combined state and local sales tax can reach as high as 11.25% in some cities.
The average combined state and local sales tax rate is 8.85%, which is the eighth highest in the nation.
Cost of Living:
California’s overall cost of living is significantly higher than the national average, especially regarding housing, which is more than twice as expensive.
This high cost of living, coupled with high taxes, could contribute to the feeling of being overtaxed, even for those who do not fall into the highest income brackets.
Public Opinion:
According to a Public Policy Institute of California survey, 71% of adults in California think the state and local tax burden per capita is high compared to other states, and 7 out of 10 residents feel they are paying more than they should in state and local taxes.
Counterarguments/Context:
While income taxes are high, California’s property tax rates are lower than the national average.
The progressive income tax system means that those with lower incomes pay a lower tax rate than they might in a flat tax state.
Some sources argue that California’s higher income tax burden is offset by a lower combined burden for other taxes.
The revenue generated through taxes funds various state services, including public welfare and education
