I’ve written in the past (and have been slagged by Michael Hiltzik) about the insane instability built into California’s fiscal policies because of our overdependence on income taxes from a few high-earners.
California took in a record $11.3 billion in personal income tax receipts in April, $4.3 billion more than it collected last April. It’s almost certain that a significant chunk of April’s haul came from Google employees — perhaps one-eighth or more of the tax receipt gain.
California’s tax structure is highly progressive, which makes it highly volatile. For the 2004 tax year, 38,000 California tax returns reported more than $1 million in income. They represented just 0.2 percent of all state-tax returns, yet they accounted for 14 percent of total adjusted gross income and about 30 percent of the total personal tax.
The top 3 percent of the returns, those with incomes exceeding $200,000, paid about 60 percent of all state taxes.
That’s all fun and games when times are good…