http://californiabudgetbites.org/2009/02/26/whats-wrong-with-this-picture/ Serving Fresh Policy News and Views - One Post at a Time Tue, 04 Aug 2009 22:04:13 +0000 hourly 1 http://wordpress.com/ http://californiabudgetbites.org/2009/02/26/whats-wrong-with-this-picture/#comment-51 Tue, 03 Mar 2009 00:49:58 +0000 http://californiabudgetbites.org/?p=460#comment-51 David, Thanks for your question. The recently approved change in 0.25 percentage point increase in personal income tax rates would increase the taxes owed by a married couple with a taxable income of $40,000 from $777 to $877, a 12.9 percent increase. In contrast, the personal income tax liability of a married couple with a taxable income of $150,000 would rise from $9,341 to $9,716, a 4.0 percent increase. (Both examples exclude the impact of any tax credits to which the hypothetical couple might be entitled). The disparity results from simple algebra – the $100 increase in the tax liability of the lower-income example represents a larger percentage increase than does the larger dollar increase represents for the higher-income example. Moreover, the higher-income couple are more likely to itemize their deductions and thus benefit from the fact that state income taxes can be deducted for federal tax purposes.

]]> http://californiabudgetbites.org/2009/02/26/whats-wrong-with-this-picture/#comment-47 Fri, 27 Feb 2009 14:50:53 +0000 http://californiabudgetbites.org/?p=460#comment-47 I don’t understand how you arrived at these numbers. I believe they are correct, but how did you do it? How does a .25 in increase = 12.9 for 40K and only 2.9 for 750K. And doesn’t this then mean that the current tax system results in the same backwardness?

]]>