California soaks the rich? Think again

Over and over, we're told, California has a highly progressive tax code that punishes the rich. The right wing makes the argument ad infinitum, to the point that it is now accepted conventional wisdom among moderates and even liberals alike. This "conventional wisdom" is cited against any effort to make the rich pay their fair share.

But a report last fall shows – surprise! – that the conventional wisdom is flat wrong. Not only does California not have a progressive tax code, it is actually highly regressive and punitive toward the poor and middle class, according to the Institute on Taxation and Economic Policy.

While it is true that California's income tax is highly progressive, any working class person will tell you that it is not the only tax they pay. California and local governments also impose high sales and excise taxes, and, despite Prop 13, residential property taxes are high because of high land values.

When you add it all up, the poorest 20 percent of tax filers (those making less than $22,000) are, on average, taxed at a 10.2 percent rate. The richest 1 percent (who average $2.2 million a year) are taxed at a 7.4 percent rate on average. The middle quintile ($36,000-$58,000) pays 8.1 percent.

Unfortunately, when the governor talks about a flat income tax he's not talking about taxing the rich at the same rate we pay. He's talking about making the tax code even more punitive toward the working class and middle class by raising taxes on workers and cutting them for the rich.

This fact is important because there is virtually no talk in Sacramento of closing the $20 billion budget deficit by making the wealthiest taxpayers and largest corporations pay even a dime more in taxes. Over the last 15 years, Sacramento has showered special interests and millionaires with tax breaks and tax loopholes. (See here and go to page 11.)

Slashing services that ordinary Californians depend on is not the solution. We need to close tax loopholes for the rich.