There’s so much leftist political babble about wealthy taxpayers “not paying their fair share” that Elvia Limón of the Los Angeles Times feels the need to remind readers today that rich people in California actually do pay taxes. Ms. Limón writes in a Times newsletter: “Just remember, no one is immune from taxes, including the state’s wealthiest.”
In case anyone was confused, her colleague John Myers explained on Friday just how far the Golden State’s richest filers are from being tax-immune:
and state lawmakers settle on details of a new California budget in June to provide another year of government services for almost 40 million people, they will do so largely by tapping the fortunes of one of the most exclusive groups of taxpayers in the nation.
The group includes almost 100,000 taxpayers with incomes above $1 million — residents who represent only about one-half of 1% of all tax returns filed in the state but collectively pay about 40% of all California personal income taxes.
As tax day approaches, it’s this small subset of people who will likely again provide an outsize amount of government cash, a reminder of how dependent the state is on their fortunes.
This is what’s known as a highly “progressive” tax system because the rich don’t just pay more than regular folks. The rich pay a much higher percentage of their income in income taxes than everyone else. Yet perhaps because California government takes so much and provides so little in return, the state’s tax system turns out to be highly unsatisfactory to Californians up and down the income scale.
Mark DiCamillo of the University of California, Berkeley’s Institute of Governmental Studies reports on a new poll of registered California voters. The survey finds that “about two in three voters (64%) consider the federal and state income taxes that they and their family have to pay are too high,” he notes. The Berkeley pollster adds that this “represents a ten percentage-point increase in the proportion of voters” holding this opinion compared to “six years ago, the last time a comparable question about income taxes was included in a statewide voter poll.” Mr. DiCamillo continues:
Contributing to the growing perception that income taxes are too high is the fact that many Californians report that their economic fortunes have declined over the past year.
The poll finds twice as many voters now describing themselves as financially worse off than a year ago (42%) as report being better off (21%). Six years ago, the reverse was true with about twice as many voters saying they were financially better off than in the prior year (48%) as felt they were worse off (25%).
The answers on the appropriate tax burden are especially striking because of the broad consensus that taxes are too high in a state where so many elected officials claim that taxes are too low. Perhaps some of these officials will eventually have to give way to successors who agree with voters.
Among the California registered voters who participated in the survey, a majority of Democrats and 70% of self-described political moderates say taxes are too high. The Berkeley poll also finds that 61% of whites say taxes are too high, which is lower than the 65% of Asian/Pacific Islanders, 66% of blacks and 69% of Latinos who say taxes are too high.
This would seem to suggest a significant problem for tax-friendly politicians who are on the ballot this year, such as Gov. Gavin Newsom (D., Calif.) and U.S. Senator
Berkeley polling also finds other reasons for such pols to be concerned. On Thursday Berkeley’s Institute of Governmental Studies noted:
Voters offer a wide array of responses when presented with a list of fifteen issues facing California and asked which one or two they consider most important for the state to address. Topping the list are housing affordability, mentioned by 31%, homelessness (29%), crime and public safety (23%) and gas prices (21%)…
Four in ten Californians (41%) also report that the recent price hikes in gasoline are causing a very serious problem for themselves and their families while another 28% say this is causing a somewhat serious problem for them. Replies are directly related to annual household income, with those at the lowest end of the income spectrum more than three times as likely as upper income Californians to say the price hikes in gasoline are a very serious problem…
Observed IGS co-Director Eric Schickler, “The substantial number of voters who see rising gas prices as a serious problem suggests that Democrats, both in Sacramento and nationally, need to develop responses that these voters can understand and find credible.”
This column recently noted the inflation problem for Democrats generally and for specific politicians like Sen. Padilla, who charted lackluster approval ratings in a recent survey from the Public Policy Institute of California. Does Sen. Padilla have credible responses to the problems afflicting Californians?
When Sen. Padilla took office in January 2021, after being appointed by Gov. Newsom to fill the seat vacated by now-Vice President
Mr. Padilla made a promise:
As the proud son of immigrants from Mexico, I watched my parents work resiliently hard for 40 years, my father as a cook and my mother as a housekeeper, to give my sister, my brother, and I a better chance in life. Today and everyday, I will work as hard as my parents did to build a better future for the next generation and give every California family a fair shot at the American Dream.
In the last 15 months, has he really been working as hard as his parents once did? It seems hard to believe, given a separate L.A. Times story from Mark Barabak, who interviewed the senator about his time in Washington. Mr. Barabak tries to offer a sympathetic portrayal but seems to have come away from their discussion only with reflections on how time-consuming the job of a politician is and a report that Mr. Padilla successfully advocated for a menu improvement in a congressional dining hall.
Golden State voters examining the incumbents available for election this fall may decide to order off the menu.
6.5 Billion Hours We’ll Never Get Back
Tax Day is of course a burden for non-Californians as well. Dan Bosch of the American Action Forum has been tracking the cost of complying with IRS paperwork requirements and reports:
Costs grew dramatically from 2021 to 2022, topping $200 billion for the first time. The $18.4 billion increase is the biggest year-over-year change since 2018, when costs exceeded 2017 levels by $24.3 billion. The largest increase came from a major change in the Qualified Business Income Deduction (QBID) estimate. In 2021, the IRS estimated just 10,000 responses and 30,000 hours. That estimate applied only to the simplified QBID, however. Over the past year, the agency added a longer version for more complicated deductions, including four schedules – or forms that must be prepared to calculate certain types of income or deductions. Total estimated responses and hours skyrocketed as a result, to 41.4 million and 336 million, respectively, at a total cost of $12.2 billion.
The other notable cost increases came from annual adjustments to the estimates for the business and individual income tax, which increased by $4 billion and $1.7 billion, respectively.
Following a nearly 25 percent drop in the total estimated hours spent complying with tax paperwork in 2021, hours rebounded somewhat to 6.53 billion.
James Freeman is the co-author of “The Cost: Trump, China and American Revival.”
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