Governor Gavin Newsom claims California is not a ‘high-tax state.’ Is he correct?

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“Here’s the truth Republicans never tell you: California is not a high tax state,” Gov. Gavin Newsom declared Tuesday in his taped State of the State address.

He’s partially correct.

But in truth, the more that someone earns in the state, the more California starts looking like a high tax state.

It’s also a high-tax state for everyone who drives a gasoline-powered vehicle. The state’s gasoline tax, which increases slightly to 59.6 cents a gallon July 1, is the nation’s highest.

And overall, “California has the highest individual income tax burden,” said an analysis of 2024 taxes by WalletHub, which analyzes financial data.

When you dig down to individual incomes, however, the story changes a bit.

“For families of modest means, California is not a high tax state,” said a study released in April by the Institute on Taxation and Economic Policy, a liberal Washington research group.

Its analysis found that for the bottom 40% of families, or those with incomes of $48,000 or less, “California taxes are lower than states like Florida and Texas.”

The more one earns, though, the higher the tax bite.

California families with incomes between $145,900 to $352,300 should pay 10.8% of their income in taxes this year, higher than the national average of 9.5%.

In Texas, residents in a similar bracket, earning $134,200 to $290,000, can anticipate paying 7.2% of income. In Florida, that bracket includes those making $118,300 to $270,600, and they pay 6.4%.

In property, sales and other taxes and California ranks fifth for overall tax burden. Its sales and excise tax burden ranks 37th, while the property tax burden is 23rd.

GOP breaks for the wealthy?

Newsom argued Tuesday that too often, Republican-led states give big breaks to the wealthy that California does not.

“Catering to big business and the rich is also why red states tax their lowest earners far more than California does. They punish you when you’re struggling, but give you a free pass when you’re wealthy,” the governor said.

He maintained that “You pay a higher percentage in taxes if you’re poor in Texas than you do if you’re wealthy in California. It’s all about who you’re fighting for.”

He’s largely correct about the taxes.

The bottom 20% of earners in California pay 11.7%, close to the national average of 11.4%. In Texas, they pay an average of 12.8% and in Florida, 13.2%.

California’s wealthiest 1% pay 12% of their income, as the state’s top income tax rate in California for millionaires is 13.3%.

In Texas, the top 1% pay an average of 4.6% in taxes, while people in Florida pay 2.7%. Neither state has a state income tax. The U.S. average tax rate in this bracket is 7.2%