03/30 -- Updated to reflect state not getting enough federal stimulus money to avoid higher income tax rate.
In February, the Legislature and Gov. Arnold Schwarzenegger agreed to a series of tax increases and spending cuts to remedy the state's growing budget deficit. Most of those tax increases recently will go into effect April 1.
Use this calculator to see how the tax increases under consideration could affect your household. Click on a new cell or hit the calculate button when done and the totals will change. May take a moment to load. Do not type dollar sign.
...
Note: If you make between roughly $30,000 and $45,000 and have several kids, you may not owe enough in taxes to lose the amount of child tax credit shown here. VLF fee increase goes into effect May 19.
Assumptions: Calculations based on Senate Floor analysis given to legislators Thursday night. Assumes that, on average, $22.13 of every $1,000 in personal income will be spent on sales taxes, up from current rate of $19.45 per $1,000. (Sales tax assumption based on figures here, but adjusted based on interviews with state finance officials noting that about 35 percent of sales tax revenue is generated by business-to-business transactions.) Assumes, based on IRS publications, that the poor pay a higher proportion of their income on sales taxes, and adjusts impact of sales tax increase accordingly. Assumes feds do not come through with stimulus money and income tax rates increase by .25 percentage points. Assumes each dependent tax credit reduced by $210.
Change Log:
(2/17) Income tax formula adjusted to better reflect impact of 5 percent surcharge.
(2/18) Replaced note about poor families not being affected by loss of child tax credit with formula illustrating point: If you are a married couple making less than $30K with kids or a single parent making less than $25K, you likely won't pay state income taxes, so it doesn't matter if the child tax deduction gets reduced.
(2/19) Replaced note about poor paying a higher percentage of income on sales tax with modified formula illustrating the point.
(2/19) Updated to reflect new bill sent to governor as follows: Eliminated gas tax increase; modified formula for income tax increase. Also, most observers now believe the feds will give the state stimulus money needed to cut income tax increase in half, so that change is reflected, too.
(3/30) Income tax formula adjusted to reflect California likely not getting enough federal stimulus money to avoid higher tax rate.
For informational purposes only.
About Comments
Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.