Sales and Income Tax Increase (2012)
Proposition 30, a Sales and Income Tax Increase Initiative, was on the November 6, 2012 ballot in California as an initiated constitutional amendment, where it was approved. Gov. Jerry Brown led the charge for Proposition 30, which was a merger of two previously competing initiatives; the “Millionaire’s Tax” and Brown’s First Tax Increase Proposal.
- Raises California’s sale tax to 7.5 % from 7.25% (3.45% 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
- 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 (percentage increase of 10.6 % over current policy of 9.3%)
- 10.3 % income tax rate 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 (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 (percentage increase of 32.26% over current policy of 9.3%)
- Imposes a13.3 % tax rate on taxable income over $1,000,000 (percentage increase of 29.13% over current “millionaires tax” policy of 10.3%)
As this proposition was passed in November, 2012, the income tax was retroactive to all earned or received since the first of the year 2012.
Based on California Franchise Tax Board data for 2009, the additional income tax is imposed on the top 3% of California taxpayers.
Estimated revenue from Proposition 30 varies from Jerry Brown’s $9 billion estimate to the $6.8 billion estimated by the non-partisan Legislative Analyst’s Office (LAO). The difference stem for the volatility cause by capital gains income from high-income earners, an issue in California’s tax system previously identified by the Legislative Analyst’s Office (LAO).