2,400 Wealthy Californians Pay No State Income Tax

 Here is a story that will boil your blood.  Apparently it is too much to ask everyone to pull their share of the weight.

2,400 wealthy Californians pay no state income tax

That number has quadrupled over the past decade, report says

By Dean Calbreath

Originally published April 14, 2011 at 1:42 a.m., updated April 14, 2011 at 8:39 a.m.

As last-minute tax filers rush to the post office this weekend to mail their income taxes, they may take heart in the fact that the state's corporations are paying a little less in state and local taxes even though individuals are paying a little more.
This year, personal income taxes will represent 51.5 percent of all general fund revenues, compared to 42 percent as recently as 2003, according to estimates by the state Department of Finance.
Last year, California ranked 15th in the nation in terms of the size of its state taxes versus personal income. That's up six notches from the year before, when it ranked 21st.
One reason for that jump is that during the 2008-2009 budget crisis, Sacramento introduced temporary increases in the personal income tax, which expired in December, and sales tax and vehicle license fees, which are slated to expire in June.
But another reason is that individual income taxes are shouldering the burden for a decrease in corporate taxes, partly thanks to tax deals arranged in the budget crisis. Those deals will cost $1.5 billion in the upcoming fiscal year, $1.6 billion next year and $1.8 billion per year from 2013 to 2015.
So who's shouldering the burden for all this?
The study estimates that the lowest-paid 20 percent of Californians now pay 11 percent of their income on state income, property and sales taxes compared to 7.8 percent tax bill among the highest-paid 20 percent.
But in terms of income taxes alone, the biggest bills are going to people making $200,000 or more. Although they represent only 4 percent of the population, they make nearly 40 percent of the state's taxable income and as a result pay 61 percent of its income taxes.
But even though the official top tax rate in California is around 9.5 percent, or 10.5 percent if you make more than $1 million per year, few pay that rate. Statistics from the Franchise Tax Board show:

• 2,430 upper-income households paid no taxes and another 5,366 paid less than 1 percent in 2008, the most recent year for comprehensive data. Although that amounts to just 1 percent of the total, those numbers have risen sharply over the past decade. In 1997, only 579 people in the upper-income bracket paid zero taxes.
• Roughly half of the upper-income households paid state income taxes ranging from 3 to 7 percent.
• Only 4 percent paid above 9 percent.

During the 2008-2009 budget negotiations, tax changes were implemented requiring the poor to pay more in taxes by lowering the threshold for paying taxes and sharply reducing the tax credit for dependent children. In 2008, a family of four did not have to pay income taxes until their income was above $51,335. But in 2010, such a family has to pay taxes once their income hits $36,591.