The Courage Campaign’s Internet ad featuring Kim Kardashian aims at the wrong target. The ad promotes raising Kardashian’s income tax rate a few points because currently her tax rate is only one-percentage point higher than the tax rate of a middle class person who earns $47,000 in taxable income.
The target should be California’s exorbitant 9.3% tax rate on middle class income earners.
The Courage Campaign claims its effort is all about “restoring the middle class.” Reducing a 9.3% tax rate on taxable income starting at $47,000 would go a long way in helping to restore the middle class.
In fact, all California income tax rates are high. California has the third highest income tax in the nation and one of the most progressive income tax structures. All the while California taxpayers also pay the nation’s highest sales tax rate.
California is a high tax state.
According to the Tax Foundation’s tax facts on California:
Tax Freedom Day Arrives on April 16 in California — Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, California taxpayers work until April 16 to pay their total tax bill (ranked 6th highest nationally), 4 days later than national Tax Freedom Day (April 12). The Tax Freedom Days of neighboring states were: Oregon, April 8 (ranked 23rd nationally); Nevada, April 2 (ranked 40th nationally); and Arizona, April 2 (ranked 39th nationally).
And, by the way, neighboring Nevada has zero income tax.
The ad emphasizes the one-percent difference in tax rates but doesn’t bother to point out the vast difference in tax dollars those rates bring in. In 2009, 34,000 California taxpayers with a Gross Adjusted Income of $1million or more — that is .2% of all California taxpayers — paid 24.2% of all the state’s income taxes. Relying on California’s high income tax payers to supply the bulk of the state’s revenue has resulted in a wild rollercoaster ride for the state’s budget when the economy cycles through good times and bad.
The Courage Campaign has teamed up with the California Federation of Teachers to raise the income tax rates on millionaires from three to five percentage points, which would soar the California tax rate to the top spot on the list of states and increase the risk of bigger deficits in down economic cycles, not to mention other potential serious economic effects.
There are plenty of reasons to pay no attention to the Kardashians. California’s tax rate is another one. Let’s put the focus on the high tax rate the middle class pays and cut it down.