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CA vs. the Other States -- revised 11 November 2022

Breaking Bad: California vs. the Other States

by Richard Rider – Chairman, San Diego Tax Fighters

Version 3.51 Revised: 11Novmber, 2022

Online version at: www.TinyURL.com/CA-vs-other-states Email: RRider92131@gmail.com

Phone: 858-530-3027 Rider Blog: www.RiderRants.BlogSpot.com

Facebook public “blog” page: www.Facebook.com/Richard.Rider

Here’s a depressing but documented comparison of California taxes and economic climate with the rest of the states. The news is not good.

California’s highest income tax rate is now 13.3% – including capital gains (CA total federal and state CG rate now the 2nd highest in the world!). 10+% taxes now start at $250K. CA now has by far the nation’s highest state income tax rate.

We are 21% higher than 2nd place Hawaii, and a heck of a lot higher than all the rest – including 8 states with zero state income tax – NH taxes only dividends and interest income (not capital gains).

CA is so bad; we also have the nation's 2nd highest state income tax bracket. AND the 3rd. AND the 5th. AND the 8th! The top 1% of CA taxpayers pay 50% of all state income tax.

https://taxfoundation.org/publications/state-individual-income-tax-rates-and-brackets/ and http://tinyurl.com/CA-2nd-CG

In Sept 2022, CA imposed a stealth 1.1% income tax increase on all earned income - without a vote of the people. A payroll deduction maternity leave program previously capped the tax at “only” $145,600 of salary. Now the cap is removed, yet the extra deductions will provide no extra benefit to the taxpayer. Moreover, the percent of the tax can rise to 1.5% of pay, if the tax is later deemed to be insufficient to fund this program. EVERY such funding program far exceeds the lowball estimated cost.

https://www.wsj.com/articles/gavin-newsoms-stealth-tax-increase-california-marginal-tax-rate-11664921470

In 2022 CA voters voted down a 1.75% income tax increase (Prop 30) on the super wealthy (over $2 million in income) to pay for electric vehicle (EV) infrastructure. The measure was funded by Lyft. Even Governor Newsom was opposed to it – recognizing that such increases will further encourage the wealthy to flee CA. If he hadn't campaigned against it, it would have passed. Even though it failed THIS time, it's a warning to the rich that they will likely face even higher CA taxes in 2024.

www.hjta.org/california-commentary/proposition-19-was-a-total-bait-and-switch-proposition-30-this-year-is-too/

CA has the highest statewide sales tax rate in the nation -- 7.25% (does not include local sales taxes). Including local sales taxes, CA is the 7th highest state. The average with local sales tax included was 8.82% on 1 January 2022 – up from 8.25% in 2017).

https://taxfoundation.org/publications/state-and-local-sales-tax-rates/#State

CA corporate income tax rate (8.84%) is the highest west of Iowa (except for Alaska), or south of NJ (our economic competitors). Overall CA has the 7th highest corporate tax rate in nation. And it's 8.84% from the first dollar of profit made. https://taxfoundation.org/publications/state-corporate-income-tax-rates-and-brackets/

Indeed, CA has a nasty $800 minimum state corporate income tax, even if no profit is earned, and even for many nonprofits. Most states have no such minimum tax. https://www.ftb.ca.gov/file/business/types/corporations/index.html

CA has the nation’s highest “gas pump” tax at 88.5cents/gallon (Jan 2022). CA state direct gas taxes are 14.4% higher than 2nd place IL. Then add in the unique 10-12 cent CA “cap and trade” tax per gallon, plus other hidden CA fees. Not included is the CA 7/1/22 automatic gas tax COL increase.

CA diesel taxes also the highest in the nation. At $1.243, CA is almost DOUBLE the national average. Yet according to a December 2020 report by U.S. News and World Report, CA has the worst roads of any state.

http://www.api.org/oil-and-natural-gas/consumer-information/motor-fuel-taxes/gasoline-tax (CA has the nation's highest diesel tax)

and

https://www.usnews.com/news/best-states/articles/2020-12-04/these-states-have-the-worst-roads-in-america

In spite of Prop 13 protections, CA homeowners pay higher property tax bills than homeowners in 39 states. Indeed, the median CA homeowner property tax bill (not the tax rate, but the BILL) is over 60% higher than the average for the other 49 states.

https://www.mortgagecalculator.org/helpful-advice/property-taxes.php

The average "impact" fees in CA for building the median single-family residence ($548,000 - May 2019) varied from 6% ($32,880) to 18% ($98,640) per home, about double the fees charged by the next most expensive state and more than TRIPLE the norm among jurisdictions that levy such fees (many governments east of the Sierras charge little or no fees). The fee is part of the purchase price, so in essence, buyers pay an annual property tax on the fee!

https://ternercenter.berkeley.edu/blog/it-all-adds-up-the-cost-of-housing-development-fees-in-seven-california-cit

Based just on GDP, CA, by far the most populous state, ranks as the 5th largest economy in the world. But adjusted for population and cost of living, CA prosperity ranks lower than all but 13 U.S. states. http://riderrants.blogspot.com/2016/07/updated-2015-figures-ca-per-capita-gdp.html

If instead of per capita GDP, we consider the states’ median household income adjusted for the COL, CA ranks a dismal 48th. Only OR and HI are worse.

https://riderrants.blogspot.com/2019/09/cas-median-household-income-adjusted.html

According to the Tax Foundation, California’s 2022 “business tax climate” ranks 3rd worst in the nation – behind New York and anchor-clanker New Jersey. https://statetaxindex.org

The American Tort Reform Foundation in 2021 ranks CA the “worst state judicial hellhole” in U.S.

https://www.atra.org/2021/12/07/california-named-worst-judicial-hellhole/

CA driving tickets are incredibly high. Red-light camera ticket $500. Next highest state is $250. Most are around $100. http://reason.org/blog/show/red-light-cameras-and-the-enigmatic

CA had the 4th highest/worst state workers’ compensation rates in 2020 – 150% of the median state rate. Workers’ comp is usually a more important factor than a state's corporate income tax. Yet we pay low benefits -- much goes to lawyers. https://www.oregon.gov/dcbs/cost/Pages/premium-index-rates.aspx

CA unemployment rate (August 2022) is 4.1%. Only 8 states are worse than CA. But unemployment figures are now badly skewed from the COVID experience. Legions of low to middle income workers have learned how to make as much or MORE not working as working. More and more, people are refusing work, working only part-time, or working off the books (tax free).

http://www.bls.gov/web/laus/laumstrk.htm and https://www.bls.gov/news.release/empsit.nr0.htm

CA public school teachers are the 3rd highest paid in the nation – avg $85,892. National avg $65,090. CA teachers earn 38% more than average in other 49 states. CA student tests are score significantly better than only 2 states. https://www.nationsreportcard.gov/profiles/stateprofile and

https://www.edweek.org/teaching-learning/teacher-salaries-are-increasing-see-how-your-state-compares/2021/04

CA annual per state prisoner cost ($112,000) is easily the highest in the nation – over triple the average cost of the 18 states with the least-costly rates.

https://presscalifornia.com/2021/06/04/state-prison-population-shrinks-but-spending-goes-up-to-112k-per-inmate/ and

www.tinyurl.com/CA-prison-cost

California gives away community college education at fire sale prices. Our California CC tuition and fees are the lowest in the nation. How low? Nationwide, the average community college tuition and fees are 2.6 times more than our CA community colleges.

https://research.collegeboard.org/pdf/trends-college-pricing-2019-full-report.pdf

This ridiculously low tuition devalues education to students – often resulting in a 25+% drop rate for class completion. In addition, because of grants and tax credits, up to 2/3 of California CC students pay no net tuition at all! One can opt out by filling out a simple “can’t pay” form. http://tinyurl.com/ygqz9ls

Complaints about increased UC student fees ignore a key point -- all poor and most middle-class CA students don't pay the UC “fees” (our state’s euphemism for tuition). There are no fees for most California families with under $80K income. 55% of all undergraduate CA UC students pay zero tuition, and another 14% pay only partial tuition. Moreover, CA's new “Middle Class Scholarship” program provides partial tuition aid for CA public college students of families with income from $80K to $150K.

http://www.universityofcalifornia.edu/blueandgold/ and

http://tinyurl.com/UC-zero and

http://www.latimes.com/local/education/la-me-middle-class-aid-20140624-story.html

CA childcare cost is higher than every state except Massachusetts. DOUBLE many states.

https://www.epi.org/child-care-costs-in-the-united-states/

California’s real (“supplemental”) 2019 poverty rate (the new census bureau standard adjusted for the COL) is still easily the worst in the nation at 17.2%. We are 45% higher than the average for the other 49 states.

https://www.census.gov/content/dam/Census/library/publications/2019/demo/p60-268.pdf Table A-5 on page 28

California has the 3rd highest per capita homeless population in the nation. Only NY and HI are worse. 9 of the 10 worst states are controlled by Democrats. https://www.homesnacks.com/most-homeless-states-in-the-us/

California has 12% of the nation’s population but amazingly has over 43% of the entire country’s TANF (“Temporary” Assistance for Needy Families) and SSP welfare recipients. That's 5.6 TIMES the percentage of TANF and SSP welfare recipients found in the other 49 states!

https://www.acf.hhs.gov/ofa/resource/twelfth-report-to-congress page 20

California ranks 50th worst for people's debt-to-income ratio, and 49th worst for percentage of home ownership. http://tinyurl.com/2-unknown-CA-stats and http://tinyurl.com/CA-debt-to-income

Average CA firefighter is paid 77.4% more than paid firefighters in the other 49 states. CA cops paid 66.3% more. CA 2017 median household income (including gov’t workers) is only 19.0% above national average.

www.tinyurl.com/CA-ff-and-cop-pay and https://tinyurl.com/ydhuj2j7

In CA, there are over 90,000 retired state and local public employees receiving $100,000+ pensions. That number is skyrocketing – up 90+% since 2013.

https://riderrants.blogspot.com/2019/11/80000-ca-government-retirees-now-get.html

CA COL is 39.8% higher than the national average (an average that includes CA) in June 2022. Only isolated HI is more expensive. The California COL is 53.8% higher than the Texas COL.

https://meric.mo.gov/data/cost-living-data-series

The median CA home costs 2.8 times more than the other 49 states’ average median home. https://www.zillow.com/research/data/ as of June 2021

CA has 2nd highest annual car owning cost – $4,112. $370 higher than the other 49 states' average.

http://tinyurl.com/zcame8j

CA residential electricity costs an average of 73.2% more per kWh than the national average. CA commercial rates are 80.2% higher. For industrial use, CA electricity is an astonishing 113.5% higher than the 50-state average – an average which includes CA! (July 2022).

https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a

NOTE: My local utility -- SDG&E/Sempra -- is considerably higher than the CA average.

The average CA home water bill is third highest in the nation. Only WV and CT are higher.

http://www.sandiegouniontribune.com/news/2015/jul/27/drought-water-prices-rise/

The top CEO’s surveyed rank CA “the worst state in which to do business” for the 19th straight year. https://chiefexecutive.net/up-for-grabs-the-best-worst-states-for-business/

In California, the rule of law is rapidly eroding. Shoplifting and looting are no longer deemed illegal in the Golden State, as long as you don't steal more than $950 at a time. Breaking into cars and taking whatever you want is too often not punishable by the courts. And people who rent housing sometimes don’t have to PAY the rent -- devastating rental owners large and small. There is no other state in the nation with such total disdain for property rights and the rule of law.

The 2019 median Texas household income ($64,034) is 20.4% less than CA ($80,440). But adjusted for COL, the TX median household income is 18.9% more than CA. It should be noted that such comparisons don’t include the state income taxes paid – too complicated. TX has zero income tax.

https://www.census.gov/library/visualizations/interactive/2019-median-household-income.html and

https://meric.mo.gov/data/cost-living-data-series

Consider California’s “net domestic migration” (migration between states). From 1992 through 2021, California lost a NET FIVE million people to other states. More people leave each year -- in FY 2019, we lost 203,000 net to other states – over 30% higher than the year before. Again, note that these are NET losses between CA and the other states. Sadly, our policies are splitting up more and more California families.

https://www.census.gov/dataviz/visualizations/051/ and

https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_net_migration

It’s likely that it’s not the welfare kings and queens departing. They are primarily the young, the educated, the productive, the entrepreneurial, the ambitious, the wealthy (such as Tiger Woods and Elon Musk) – and retirees seeking to make their nest-eggs provide more bang for the buck.

BTW, retirees are the least expensive group for a state – they don’t go to jail, they don’t commute during rush hour and – most important – they don’t breed! Students are by far the biggest single CA state budget cost.

NOTE: To see more such fact-based disclosures, go to my blog at www.RiderRants.blogspot.com, or my more active Facebook “page” www.Facebook.com/Richard.Rider (“friend” me). The very latest fact sheet Word file (this wonky handout) is available free upon request.

Posted 8th November 2012 by Richard Rider

Labels: CA Taxes California compared to other states taxes



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