Sorry, if the dog never heard of it, ever, it can’t be true.

Rex Dog,

If you favor high taxes on high wage earners, you will be pleased to know that California has a much more aggressive phase out of itemized deductions. Per the CA FTB: “Itemized deductions must be reduced by the lesser of 6% of the excess of the taxpayer’s federal AGI over the threshold amount or 80% of the amount of itemized deductions otherwise allowed for the taxable year. For “Married filing jointly,” the threshold is $339,464.

In any event, CA state income taxes is by far our highest (mostly) deductible on fed Sch. A, and CA taxes are not deductible on CA tax liability. Property Tax is next highest.

So, what we are left with after excluding CA income taxes and applying the 6% phase out is lower than the $8K standard deduction.

Back to Phil M: If it’s true he is/was pulling down $50M AGI, then his CA income taxes are around $6.5M, with ZERO fed deduction. He must really like living in CA.

He is moving soon I bet- like Tiger did.

http://live.wsj.com/video/phil-mickelson-relists-san-diego-home-for-71m/EACB6E4B-5D50-4B68-8B27-968F029E057B.html#!EACB6E4B-5D50-4B68-8B27-968F029E057B

David, I have never in my life heard of a person with an AGI of $900K+ taking a STANDARD deduction- ever.

You’re not messing with us, like Teddy Steals does, are you!

The honest answer to the “tax breaking point” is “it depends”, which is why Laffer drew a curve instead of a vertical line. Everyone has their reasons that they live where they live; income tax rates are just one factor. Smug Jerry Brown knows he has a captive audience to stick it to with prop 30, since many high AGI people are stuck in CA to get their high AGI. If they leave the state, their income tax savings are lost due to their overall income reduction. CA government employees get their vig!

To answer for ourselves: We plan to leave CA in a few years, when my wife retires, because her income is tied to CA, and mine not so much. We like living here for the most part, but there are other parts of the country we also like, and having a tax reduction help subsidize the move is nice (but not enough to accelerate our move).

Back to Phil M: If it’s true he is/was pulling down $50M AGI, then his CA income taxes are around $6.5M, with ZERO fed deduction. He must really like living in CA.

So, here’s a personal question; feel free not to answer, of course.

IF ITEP’s state/local tax rates are anywhere near correct (your mileage may vary)

The approximate rate for the top one percent in California is 8.8%,with the federal offset.

In Washington state, it is 2.8%.

Is that six percent difference enough to tempt you to move to Washington?

Six percent of $935,000 is more than I make in a year, so everything is relative.

No one on this board considers the “one percent” to be evil. Unless, of course, he’s a law enforcement officer or firefighter.

David,

Are you familiar with ITEP’s distributional analysis? What you are describing, they refer to as “federal deduction offset”

http://www.itep.org/whopays/ see “complete report (PDF)

The interesting thing about California’s state/local tax is that the highest income earners pay MUCH higher taxes than high income earners in most other states……………BUT, their state/local tax as a percent of income is LOWER than the national average for all income groups.

According to ITEP:
” Most significantly, the report concludes that all states have regressive tax systems that ask more from low- and middle-income families than from the wealthiest. 

It also finds: States praised as “low tax” are often high tax states for low and middle income families.”

“It is what it is”
I like that.

I never denied the poverty rate. I never said anything about the poverty rate.

And I agree, there is little difference between second highest taxed state and fourth highest.

Simple statement of fact: an “average” is:

” the result obtained by adding several quantities together and then dividing this total by the number of quantities; ”

A fifth grader can do it. The figures are available from US Census Bureau. Tax Foundation and others have been compiling this data for years. The latest figures available are from 2011.

California average state/local tax burden is $5,136. There may not be a large difference between “second highest” and “fourth highest” taxed state, but there is a huge difference between $5,136 and $9,509.

And all the other figures from WalletHub are wrong. California taxes are NOT 36% higher than the national average.

The author mentions the higher poverty rate and higher cost of living in California. We can only guess why he did not mention the average income is also higher than the national average. Doesn’t fit the agenda?

It is what it is.