Jerry Brown Reveals An Eye-Popping Fact About Tax Collection In California

There are people in California not paying their "fair share."

It can often get confusing when discussing exactly who pays what percentage of income taxes both on a state and federal level. Debates often mix up "income taxes" with "taxes." People will say the "Top ___ percent of income earners pay _____ percent of all federal income taxes" without providing context.

It might have been an accident on his part or maybe he doesn't care, but California Governor Jerry Brown revealed a remarkable statistic about California taxpayers in a discussion about his proposed budget plan. From the L.A. Times:

Stock market strength has again produced sizable capital gains for the state's most wealthy, one of the primary drivers of income tax revenue. Brown remarked on Friday that as few as 15,000 tax filers in the state provide one-quarter of the income taxes collected. When the fortunes of those Californians suffer, so does the state budget.

California's population hovers around 40 million. Brown says 15,000 taxpayers combine to pay 25 percent of the collected income taxes. For those who don't want to do that math, that's 0.0375 percent of the population paying a quarter of the income taxes in California.

That's why when you hear Democratic politicians bleating about "the rich" paying their "fair share" it's a ruse. The wealthiest Americans pay a whole hell of a lot more than their "fair share."

The difficulty to pull of real tax reform at the federal level remains high. Why? Contrary to the myth perpetrated by Democrats with help from the media, the middle class benefits most from our current system. Nearly 50 percent of Americans do not pay income taxes. Yes, they have income taxes taken from their paychecks. But thanks to generous deductions and tax credits, their tax liability gets reduced to zero when it comes time to file with many taxpayers getting a "refund" on taxes they did not pay.

That's not "mean" or "cruel." It's just a fact. On the state level, the wealthiest pay the bulk of those taxes, too.

The system will not sustain itself by continuing to increase the tax burden of those at the "top."

No. 1-2

Taxes are "legalized thievery". Government officials take nearly ZERO Responsibility for HOW? those dollars are distributed.All the government seems to WANT is more Revenue so they can SPEND more dollars. Fair & Balanced I think not

Dave From Florida
Dave From Florida

I remember at the start of the Great Recession and the Fed's start of QE economists all saying this would be one of the problems with unwinding it. I'm sure the federal government gets a large portion of their revenue from capital gains too so when interest rates get normalized and the market reverses for lack of cheap money inflows all governments are going to get hurt. They are going to either have to cut spending drastically or raise taxes sharply if they are getting 1/4th of their revenue from capital gains and in California's case we already know which one they'll pick. I suppose the fed could continue to manipulate markets to drive the markets higher but that would be plain suicide. The next market crash will result in sub 2% interest rates forever.