Dave Johnson, Speak Out California.
People get hysterical when talking about tax increases. They say wealthy people will pack up and leave (parking their yachts in the Nevada desert?) They say companies will relocate.
For perspective, if there is a 2% tax increase on incomes over $500,000 a person with $600,000 taxable income will pay $38.42 more in taxes per week.
If you think people who make $600,000 a year can’t afford $38.42 per week, and will leave behind their beautiful house and connections and friends, I suggest you should think again.
Notes: Taxable income is income after all deductions. Tax rates only apply to the income in that bracket, so a person with $600,000 in taxable income will pay the increased taxes on $100,000 if the taxes apply at $500,000. This means a 2% tax increase applies to that $100,000 only, which is $2,000 per year, or $38.42 per week.
Click through to Speak Out California.
In most cases, state taxes paid are deductible on the federal return, so the rich folks’ federal tax bill will go down by a percentage of the amount paid extra to the state. If someone is in the 33% federal tax bracket then he or she would save about one dollar of federal tax for every three dollars of CA taxes paid.