Income tax revenues in California

2008-11-29

in Economics, Politics

Surprising statistic of the day: according to The Economist, half of the state income taxes in California are paid by just 144,000 wealthy individuals. They represent about 0.39% of the state’s population of 36.5 million.

That can be interpreted in two rather different ways. On the one hand, you could highlight the degree to which that represents a heavy tax burden on a small number of people. On the other, you could say that the fact that so few people pay so much of the tax demonstrates just how concentrated wealth has become. Either way, it is an interesting figure.

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{ 2 comments… read them below or add one }

Sarah November 30, 2008 at 3:19 pm

Having spent the past few days looking at income distribution trends in the US over the past thirty years, I would suggest that it indicates an astonishing concentration of INCOME among a few people. What it doesn’t tell you about is WEALTH which is the accumulation of income over time (houses, stocks, bank deposits etc) & requires a different measure, though you are right in thinking it is highly inequitably distributed. It is worth noting that if US states taxed wealth more and income less then it would produce a) a more equitable distribution of wealth, b) greater class mobility (i.e. fewer people whose class is determined by that of their parents) and c) quite possibly less of a budget shortfall during recessions.
As an aside, it is interesting to see that the Economist article notes the absurd levels of spending on incarceration as part of reason why states are in debt. I concur with their judgement that this is a self-imposed act of folly.

Sarah November 30, 2008 at 5:56 pm

For more information on income distribution trends for the very rich, I recommend Top Incomes Over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries by Atkinson & Piketty. Usefully, it is available through MyiLibrary so those with subscriptions via university libraries etc can read it online.

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