Low-Income Californians Pay More State and Local Taxes Says Study

A new report says low-income Californians who pay a disproportionate share of their income in taxes could benefit if adjustments are made to Proposition 30 and other tax polices.

The California Budget Project says the bottom 20 percent of Californians pay more than 10 percent of their income in state and local taxes, while earning about $13,000 a year on average. The top one percent pay just under nine percent. They earn an average $1.5 million dollars per year.

“Over time, income is increasingly concentrated at the top,” says Luke Reidenbach, a Budget Project analyst. “Right now, about 20 percent of income in the state goes to just the top one percent of Californians.”

The study says the temporary sales tax increase under Prop. 30 disproportionately effects low-income people and should be allowed to expire. The study also suggests the state create an “earned income tax credit” to extend the federal credit.