4 ms·

> I live in California. The state with highest tax rate in the country. This is, at best, a misleading statement: https://wallethub.com/edu/states-with-highest

> I live in California. The state with highest tax rate in the country. This is, at best, a misleading statement: https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494 https://wallethub.com/edu/states-with-highest-lowest-tax-bur... shows that California is 10th by tax burden, not 1st. It's not even first by income tax burden.

pirate787 5y ago
You are confusing rate and burden. The top burden is different from the top rate-- tax burden is a function of income and demographics.
- davidgay 5y ago
  I'm not confusing them, but highest tax rate is a useless statistic. Quoting it is thus usually used to push and agenda, not to understand and explain a complex situation.
  - CyberRabbi 5y ago
    You could equally be accused of pushing an agenda by quoting an average to refute the max without any further context. Both numbers are misleading.
CyberRabbi 5y ago
How is “Tax Burden” calculated? How is “personal income” determined? This is opaque and essentially meaningless. It remains true that California has the highest tax rate in the country.
- davidgay 5y ago
  It says it in the link: "property taxes, individual income taxes and sales and excise taxes — as a share of total personal income in the state." As for personal income, you declare it every year on your tax form.
  - CyberRabbi 5y ago
    If that’s the case then something is wrong with their data. They say that 3.78% is the individual income tax “burden” on personal income in California and that is just not true unless they are doing some sort of average across the population. The income tax rate in California can be as high as ~13%
    - MarkSweep 5y ago
      The top rate 12.3% only applies to income in excess of $600k for single and $1.2m for married. How is quoting this rate at all relevant for average people? https://www.ftb.ca.gov/forms/2020/2020-California-Tax-Rate-Schedules.pdf https://www.ftb.ca.gov/forms/2020/2020-California-Tax-Rate-S...
    - seanmcdirmid 5y ago
      > They say that 3.78% is the individual income tax “burden” on personal income in California and that is just not true unless they are doing some sort of average across the population. Why do so many people not understand how graduated income taxes work? And why wouldn’t you average the tax burden across the entire California population when calculating its “tax rate”, unless you are claiming the highest tax rate in California someone could actually pay rather than the rates paid on average?
      - CyberRabbi 5y ago
        One camp is referencing the max. The other camp is referencing the average. The max does not refute the average and vice versa therefore both are misleading. A distribution would be more clear.
        seanmcdirmid 5y ago
        If one means to say highest maximum tax rate, just say it. No weasel interpretations. But I guess these are the same people that don’t understand how America dealt with a 90% income tax rate in the 1950s. Or a 77% tax rate until 1981!
anonygler 5y ago
Always brought up and a bit of a red herring. Averaged out, yes. But prop 13 gives older generations are far lower tax burden. If you’re a young home owner in California, it’s absolutely the highest tax burden in the country.
- nrook 5y ago
  It's not a red herring. If I think my taxes are too high, and I hear "California has the highest taxes in the country!", I will think, "Oh, California should spend less money so my taxes go down." But if I hear "California has extremely high taxes for people like me, but very low taxes for certain other rich people," I will think, "California should reform its tax policies so that it gets more money from those people and less from me."
seanmcdirmid 5y ago
Superlatives are weird. You can claim California has the highest tax rate and it could actually just be average, because you aren’t technically comparing against anything. If the commenter said “California has the highest tax rate compared to any other state”, the statement would be false, but leaving out the comparison makes it true by default. Of course, that’s just advertising law (what you can legally claim about your product), this is an online forum based on higher standards.
- mullen 5y ago
  Why would you take anyone seriously where the first thing to come out their mouth is a lie? Words matters. Their context matters.
cmurphycode 5y ago
Hmm, I don't quite understand this methodology. This site lists my state, Massachusetts, as having a 3.29% individual income tax burden, but our income tax rate is a flat 5% (no brackets). I'm looking at the exemption list (https://www.mass.gov/service-details/view-massachusetts-personal-income-tax-exemptions https://www.mass.gov/service-details/view-massachusetts-pers...) and I can't see how it could possibly make that big of a difference.
- sudosysgen 5y ago
  The dependent exemption and old age exemptions definitely look like they could knock out 1.5% of income. If you have an income of 70k and two dependents, you would have an effective tax rate of 2.14%.
  - cmurphycode 5y ago
    can you clarify how you got that result? 70,000 - 8800 (married filing jointly) - 2000 (two dependents) = $59200 taxable income, $2960 tax bill. An effective rate of 4.22% To reach the site's stated 3.29%, this family would need to make around 32k a year. Fwiw, it appears the average household income in Massachusetts is about 80k.

pirate787 5y ago

You are confusing rate and burden. The top burden is different from the top rate-- tax burden is a function of income and demographics.

davidgay 5y ago
I'm not confusing them, but highest tax rate is a useless statistic. Quoting it is thus usually used to push and agenda, not to understand and explain a complex situation.
- CyberRabbi 5y ago
  You could equally be accused of pushing an agenda by quoting an average to refute the max without any further context. Both numbers are misleading.

CyberRabbi 5y ago

How is “Tax Burden” calculated? How is “personal income” determined? This is opaque and essentially meaningless. It remains true that California has the highest tax rate in the country.

davidgay 5y ago
It says it in the link: "property taxes, individual income taxes and sales and excise taxes — as a share of total personal income in the state." As for personal income, you declare it every year on your tax form.
- CyberRabbi 5y ago
  If that’s the case then something is wrong with their data. They say that 3.78% is the individual income tax “burden” on personal income in California and that is just not true unless they are doing some sort of average across the population. The income tax rate in California can be as high as ~13%
  - MarkSweep 5y ago
    The top rate 12.3% only applies to income in excess of $600k for single and $1.2m for married. How is quoting this rate at all relevant for average people? https://www.ftb.ca.gov/forms/2020/2020-California-Tax-Rate-Schedules.pdf https://www.ftb.ca.gov/forms/2020/2020-California-Tax-Rate-S...
  - seanmcdirmid 5y ago
    > They say that 3.78% is the individual income tax “burden” on personal income in California and that is just not true unless they are doing some sort of average across the population. Why do so many people not understand how graduated income taxes work? And why wouldn’t you average the tax burden across the entire California population when calculating its “tax rate”, unless you are claiming the highest tax rate in California someone could actually pay rather than the rates paid on average?
    - CyberRabbi 5y ago
      One camp is referencing the max. The other camp is referencing the average. The max does not refute the average and vice versa therefore both are misleading. A distribution would be more clear.
      - seanmcdirmid 5y ago
        If one means to say highest maximum tax rate, just say it. No weasel interpretations. But I guess these are the same people that don’t understand how America dealt with a 90% income tax rate in the 1950s. Or a 77% tax rate until 1981!

anonygler 5y ago

Always brought up and a bit of a red herring. Averaged out, yes. But prop 13 gives older generations are far lower tax burden. If you’re a young home owner in California, it’s absolutely the highest tax burden in the country.

nrook 5y ago
It's not a red herring. If I think my taxes are too high, and I hear "California has the highest taxes in the country!", I will think, "Oh, California should spend less money so my taxes go down." But if I hear "California has extremely high taxes for people like me, but very low taxes for certain other rich people," I will think, "California should reform its tax policies so that it gets more money from those people and less from me."

seanmcdirmid 5y ago

Superlatives are weird. You can claim California has the highest tax rate and it could actually just be average, because you aren’t technically comparing against anything. If the commenter said “California has the highest tax rate compared to any other state”, the statement would be false, but leaving out the comparison makes it true by default. Of course, that’s just advertising law (what you can legally claim about your product), this is an online forum based on higher standards.

mullen 5y ago
Why would you take anyone seriously where the first thing to come out their mouth is a lie? Words matters. Their context matters.

cmurphycode 5y ago

Hmm, I don't quite understand this methodology. This site lists my state, Massachusetts, as having a 3.29% individual income tax burden, but our income tax rate is a flat 5% (no brackets). I'm looking at the exemption list (https://www.mass.gov/service-details/view-massachusetts-personal-income-tax-exemptions https://www.mass.gov/service-details/view-massachusetts-pers...) and I can't see how it could possibly make that big of a difference.

sudosysgen 5y ago
The dependent exemption and old age exemptions definitely look like they could knock out 1.5% of income. If you have an income of 70k and two dependents, you would have an effective tax rate of 2.14%.
- cmurphycode 5y ago
  can you clarify how you got that result? 70,000 - 8800 (married filing jointly) - 2000 (two dependents) = $59200 taxable income, $2960 tax bill. An effective rate of 4.22% To reach the site's stated 3.29%, this family would need to make around 32k a year. Fwiw, it appears the average household income in Massachusetts is about 80k.