The California legislature has unveiled new efforts that will significantly raise the rates of taxable income for those with salaries over $1 million. The goal of this new initiative is to improve funding for K-12 schooling and for a series of government services that will be needed in the wake of the pandemic.
The bill was introduced throughout the summer and it would impose a new 1% surcharge on adjusted gross income over 1 million and a 3% surcharge on gross income over $2 million. Taxpayers that earn over $5 million would see a surcharge of up to 3.5%.
It’s estimated that these surcharges could account for up to $6.8 billion in annual revenue that could go to much-needed projects throughout the United States. The impact on taxpayers that earn over $1 million was felt immediately in the fall after they filed for the next instalments in September.
The proposal has led to improvements for the stock market as well as for managing the record high unemployment programs for millions of people across the United States. As California’s looking for new ways to invest in essential services, programs like these are working to help educational programs survive and ensure that crucial services will be able to continue even with much of the state facing extreme strain from the pandemic.
Temporary tax levies occurred throughout 2012 as well and these tax increases have continued to bolster cash reserves and work towards reducing the operating deficit of the United States. With a current deficit projected at $8.7 billion, actions like this will need to continue to get us through the pandemic and beyond.
This article was written by Alla Tenina. Alla is one of the best estate planning attorneys in Los Angeles California, and the founder of Tenina law. She has experience in bankruptcies, real estate planning, and complex tax matters.The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.