Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

Saying that California is a low tax state is completely wrong. The state is known for high taxes even when compared to other liberal states in the US.


This is misleading due to how states structure their tax code. California has a high top marginal rate, but its progressive taxation system leads to many of the middle class and under paying lower taxes than in other states. I live in Iowa, for example, and the top marginal tax rate is 8.9% for all income earned over $72k. The top marginal rate in California is 13.3%, but only applies to income over $1MM. A couple making $80k in California will pay about $2k (effective 2.52%) in income taxes, while the same couple in Iowa will pay $3,976 (effective 4.97%). You can't just compare tax rates by comparing the top marginal rate. You've got to look at how they actually impact people.


As if that's not complicated enough, throw in the 10% CA sales tax versus 7% in Iowa. And property tax. Prop 13, Prop 8(?), et. al., can make a considerable difference, as I understand it. Props or not, the total is likely to be higher just because housing is much more expensive in CA. 20% of 200,000 is a lot less than 10% of 1MM.

But in the end, as a WA resident who has given serious consideration to moving to CA and has done this math a few different ways, my gut has a hard time believing Iowa's overall tax burden is comparable to California's. Regardless, maybe it's true or maybe it's not, but is an extra $10,000 in taxes what's really keeping you from picking up and moving? I posit that for most on HN, no, it's a lot of other factors like housing and traffic.

But to the topic at hand, others have pointed out that PG&E is financed by rate payers, not taxes. And CA has some pretty high electric rates. So why are the forests catching on fire?


That's all relative though. In the US, California has high taxes. Compared to many European countries, taxes in California are still very low.


Not generally but they are a low property tax state for those "grandfathered" by Prop 8. Which is another can of worms and not particularly relevant here.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: