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1 William Ahern, California Legislators Push for More Double-Digit Income Tax Rates 1 (2008)

handle is hein.taxfoundation/ffbdexz0001 and id is 1 raw text is: UFISCAL July 2008 No. 134 California Legislators Push for More Double- Digit Income Tax Rates By William Ahern With the new Democratic push in the California legislature for higher income tax rates, it's worth taking a look back at how the top rates have changed in recent years. California was an early adopter of double-digit income tax rates, applying rates of 10 and 11 percent to high incomes throughout the early 1990s. Hawaii applied a 10% top rate at that time, but no other state applied a double-digit rate to all taxable income. Several other states had double- digit income tax rates on their books during the 1990s but allowed federal tax payments to be deducted on the state return, reducing the effective state rate substantially. Hawaii lowered its top tax rate into the single-digit range in 1998, and the trend away from federal deductibility has reduced every other statutory rate into single digits. California's rates and brackets from that era are shown in Table 1. ,Table 1 California's Personal Income Tax Rates in 1995 SinglesZ Couplesi o > $ 4,83l 2o > $ 9,662 40/o >$11,449i 4/o >$ 22,898i ..................... '/ ....,S ~ ......................................................... 800> $ 25,83 8002%> $ 50,66Z 93 0 >$31 700i ...........................3.0..$63,40 4%o> $ 109,4964 Oo>$ 29,872 .... . 0 o 9,87 6. .........................1 ..o >. $43 9,874 .................... 1 ° ............................................... ................... > $ 2 9 8 2 i .................................... > $ 4 9 7 4 Source: CA Franchise Tax Board ,h ttp:,/vNvwwftb.ca.gov!/forms/95 forms/5 resSch.pdtf