Tax Foundation: CA has fourth-highest state taxes

california taxes, 13.3 percentThe newest figures just released by the Tax Foundation show California continues to be one of the highest-taxes states in the country. According to “Facts & Figures 2015: How Does Your State Compare?” the Golden State now ranks fourth-highest for taxation. The only states with higher taxes are Connecticut and New Jersey, tied for the highest; and New York in third place.

A big problem was pointed out to CalWatchdog.com by Esmael Adibi, A. Gary Anderson Center for Economic Research and Anderson Chair of Economic Analysis at Chapman University: Three of our Western States competitors make the Top Ten list of the least-taxed states: Nevada in third place, Utah in 9th and Texas in 10th.

Overall, the state with the least taxes is Louisiana, followed by Mississippi, South Dakota and Tennessee.

Adibi pointed out that California’s high rank derives largely from it having the highest personal income tax in the country, 13.3 percent at the top marginal rate after voters passed Proposition 30 in 2012. “Prop. 30 really pushed us over,” he said.

He added that, despite the Proposition 13 tax limitation measure, California ranked only 14th-best for property-tax collections. If property here cost less, then California would rank much higher. “But property is so expensive, the taxes paid equal the tax rate times the amount you pay for the property,” he calculated.

California also scored low on the overall 2015 State Business Climate Index, with third-worst business climate. Worst of all was New Jersey, followed by Connecticut.

That’s similar to the finding of CEO Magazine’s survey of CEOs, who have ranked California the worst state in which to do business for eight straight years.

And the Kosmont-Rose Institute Cost of Doing Business Survey found, “California dominates the list of the most expensive cities, with a total of 12 cities – nine in Southern California and three in the San Francisco Bay Area. Los Angeles and the San Francisco Bay Area are the two most expensive metropolitan areas in the western United States.”

Leaving the Golden State

California net population outflow“There’s no question high taxes at least affect some people on whether to stay in California or move to a state with lower taxes,” Adibi pointed out. He provided CalWatchdog.com a chart showing “Net Population Outflow and Destination” for California. “Net” means both those coming into the state and those leaving.

From 2005 to 2013: 279,000 Californians left for Texas, 222,500 for Arizona, 157,200 for Oregon, 153,200 for Nevada, 98,300 for Washington State, 76,900 for Colorado and 59,500 for Utah; all other states were 217,500.

Rankings

Some other rankings from the Tax Foundation “Facts & Figures”:

  • Sources of California state and tocal tax collections: 28.1 percent from property tax, 22.3 percent general sales tax, 30 percent individual income tax, 4.3 percent corporate income tax and 15.3 percent all other taxes.
  • Federal aid as a percentage of general state revenue: 25 percent. The national average is 30 percent. That is, California is a “donor state,” it pays more into the federal government than it gets back.
  • State individual income tax receipts per capita: $1,750, ranking fourth; Connecticut was highest, at $2,174.
  • State and local sales tax rate: 7.5 percent, highest of any state. (Some local governments add to that.)
  • State gasoline tax rate per gallon: 45.39 cents, second highest. Pennsylvania is highest, at 50.50 cents.
  • State spirits excise tax rate, per gallon: $3.30, 39th highest; California is Wine Country. The highest was Washington State, at $35.22.
  • Like most states, California exempts groceries from the sales tax. The highest grocery sales tax is Tennesse’s, at 5 percent.
  • California does not have a state inheritance tax, or “death tax.” The highest state rate is Washington State, at up to 20 percent.
  • California state and local debt is $11,094 per capita, 8th highest. At the top is New York, at $17,405.

13 comments

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  1. bob
    bob 11 March, 2015, 19:24

    Tax’em to the stoneage, son!

    Reply this comment
  2. bob
    bob 11 March, 2015, 19:28

    That is, California is a “donor state,” it pays more into the federal government than it gets back.

    Well, someone’s gotta pay Uncle Sugar…

    ..donor..

    You misspelled sucker, HTH.

    Reply this comment
  3. bob
    bob 11 March, 2015, 19:30

    That is, California is a “donor state,” it pays more into the federal government than it gets back.

    Hey, we’ve been electing the dynamic duo of Crimestein and Babs for decades…why didn’t they bring home the loot!

    Reply this comment
  4. S Moderation Douglas
    S Moderation Douglas 11 March, 2015, 19:40

    “Overall, the state with the least taxes is Louisiana, followed by Mississippi, South Dakota and Tennessee.”

    ” Federal aid as a percentage of general state revenue: 25 percent. The national average is 30 percent. That is, California is a “donor state,” it pays more into the federal government than it gets back.”

    California is a donor state. Guess who are the highest “receiver states”?

    1. Mississippi
    2. Louisiana
    3. Tennessee
    4. South Dakota

    In each of these four “lowest tax” states 39%-42% of their state revenue comes from federal aid.

    Is this a good thing?

    More importantly, if you earn the “average” wage (about $53,000 a year) and are considering moving to one of these “low tax” states……think again. Taxes are very close in the lowest four quintiles.

    If you are in the highest five percent of earners, though; you’re good to go. (Assuming you will continue to earn highest wages in your new state). Generally speaking, low tax states are only “low tax” for those with the highest incomes.

    For most of us, though, taxwise, we have the best of both worlds…..beautiful state…..average taxes.

    And the glass is as least half full.

    Reply this comment
  5. S Moderation Douglas
    S Moderation Douglas 11 March, 2015, 20:00

    “taxwise, we have the best of both worlds…”

    Caveat; taxes are not the only reason to move from one state to another. Probably not even the most important.

    Average salary
    Cost of living
    Employment rate
    Working conditions

    http://m.money-rates.com/research-center/best-states- to-make-a-living/2014-complete-list.htm

    California still not looking so bad, if you believe in these kinds of lists.

    As Erma Bombeck says; The grass is always greener over the septic tank.

    Reply this comment
  6. JimmyDeeOC
    JimmyDeeOC 13 March, 2015, 12:01

    Another reason?…..Let’s not mince words…….Even in Orange County, the place is getting absolutely overrun with foreigners. Legal, illegal and quasi-legal. Call me bigoted, xenophobic, whathave you…..I don’t care. I prefer to live mostly among those of my own kind. (Though that’s not all that strange………you can go visit the four corners of the globe and you’ll find people say pretty much the same thing).

    I got a friend in Fullerton…a mile west of Downtown. Fine area. But head down Euclid towards I-5 and except for the street signs you’d swear you were in Baja.

    Meanwhile at home in Irvine, my section of which is little more than a mash-up of the better suburbs of Seoul, Taipei and Tehran. Which is fine, but let’s face it………I don’t have anything in common with these people, nor they with me.

    Now the kids of all flavors get along fine, of course, from what I see in Irvine. That’s because they grow up together, and form their own culture. So that gives me hope for the future.

    But what am I gonna do in the meantime?….sit here while I get buffeted by wave upon wave of greenhorns who are either horrible drivers or leave their soiled Pampers on the beach? Eff that.

    It’s not a race thing. Nor is it an ethnic thing. But it sure as hell is a language and culture thing.

    Reply this comment

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John Seiler

John Seiler

John Seiler has been writing about California for 25 years. That includes 22 years as an editorial writer for the Orange County Register and two years for CalWatchDog.com, where he is managing editor. He attended the University of Michigan and graduated from Hillsdale College. He was a Russian linguist in U.S. Army military intelligence from 1978 to 1982. He was an editor and writer for Phillips Publishing Company from 1983 to 1986. He has written for Policy Review, Chronicles, LewRockwell.com, Flash Report and numerous other publications. His email: [email protected]

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