Written by Miguel Palacios
According to CalMatters.org, Biden’s proposed tax plan will nearly double taxes collected on capital gains in addition to tax increases on earned income for some residents. As it is, most of California’s tax revenues come from its wealthiest residents. Of the nearly 40 million taxpayers in this state, approximately 50% of the tax revenues come from about 150 thousand residents. Of those revenues, a large portion already comes from these resident’s capital gains.
As the pandemic continues, businesses continue to lose profits, especially here in California, where Gov. Newsom has implemented some of the countries strictest quarantine restrictions. Yet as many people get breaks from the government because of this, the top 1%, who are also experiencing financial losses, continues to have their expected taxes increased. California has one of the highest marginal tax rates in the country, at 13.3%, If Congress approves Biden’s plan, California’s top earners will see their tax rate increase to 39.6%, and the combined marginal rate of these top earners will be nearly 53%.
It appears that in California if you work hard and earn a lot of money, you should be punished by having half of your wages taken for tax purposes. As we have reported before, it is reasons like this that are pushing large corporations out of California, and into the arms of states with more welcoming and friendly tax rates, like Texas and Nevada. There has already been some movement or plans for movement, such as Elon Musk and Tesla, and many others listed here who have grown tired of California’s abuse of hard-working people and corporations.
Gov. Newsom as well, as other Democrat state governors, have requested the $10k cap on state and local taxes implemented by the Trump administration be repealed. They just want to increase their state revenues. Both Senator Schumer and House Speaker Pelosi insist that this repeal of the cap be part of any new tax legislation.