Be sure to follow me on Twitter @leftiblog

Friday, April 13, 2007


Helping along that "rich get richer, poor get poorer" thing

This was a major theme of Peter Camejo's Green Party campaign for Governor of California, and now a new study shows he was right on the money:
Low-income Californians pay a disproportionately large share of their income in state taxes, while the Golden State's richest citizens spend a much smaller share on taxes, according to a joint study by two research groups.

The report, released five days before this year's April 17 tax filing deadline, showed that the state's strongly progressive personal income tax - demanding proportionately more from the wealthiest Californians and nothing from the poorest - falls far short of counterbalancing the regressive effects of sales taxes and excise taxes on items such as gasoline, tobacco and alcohol. Property tax is also regressive, according to the study.

"It's an upside down tax system: the more you earn, the less you pay," said Matt Gardner, executive director of the Institute on Taxation and Economic Policy, based in Washington D.C.

The analysis found that the poorest 20 percent of Californians - with an average income of $11,100 in 2004 dollars - spent 11.7 percent of their income on all types of state taxes, both direct and indirect. The wealthiest 1 percent, with an average income of nearly $1.6 million, spend 7.1 percent on state taxes, and the next 19 percent spent 8 percent on state taxes.

Moreover, the report noted, 1,343 of the state's 449,277 households earning more than $200,000 paid no personal income tax in 2004, the most recent year for which data were available. They benefited from various tax breaks, including the research and development credit. The number of these high-income "no tax" returns had more than doubled since 1996, the research found.

This page is powered by Blogger. Isn't yours? Weblog Commenting by HaloScan.com High Class Blogs: News and Media