(California) State taxes going up because of deflation

[Newsjock]

Source: San Francisco Chronicle

California taxpayers just got hit with another increase in state income taxes, and it didn't require a vote from a single legislator.

The culprit: deflation.

... As a result, everyone's state taxes will go up by a modest amount this year. The amount will vary depending on taxpayers' income, whether they itemize deductions and how many personal exemptions and other credits they claim.

A single person with no dependents and $51,000 in adjusted gross income would pay an extra $41. A married couple with two dependents and $90,000 in income would pay $71 more, according to the Franchise Tax Board. (This assumes both parties take the standard deduction.)

Once a taxpayer reaches the top tax bracket, the added tax doesn't change much no matter how much money they make. A married couple with two dependents and $1 million in income would pay only $79 more as a result of deflation.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/08/26/MNBK19E474.DTL&type=business&tsp=1

[WriteDown]

1. Californians can't catch a break.

Maybe I should call my sister.

[valerief]

2. Whew! I was worried really, really rich people would have to pay proportionately as much as

worker bees, but I'm glad to see they have a very, very low limit. Of course, they shouldn't have to pay a penny more. After all, they deserve all their money, no matter whether earned it themselves or not.

:sarcasm:

[zbdent]

3. flat tax for ya ...

[customerserviceguy]

4. But if there really is true deflation

then the prices of what people have to buy with their incomes goes down, too. Frankly, that's an attack I'd expect to see made on this, while fuel prices are no longer in the stratosphere, I'd bet nothing else in CA has gone down, except for the prices of McMansions.

The ways we use to measure inflation are pretty much stuck in the 50's and 60's when government first started taking an active interest in quantifying inflation. They probably don't make a lot of sense in the 21st Century.

[Igel]

5. The story is mostly a ruse.

Picking on a small point while presenting a larger point.

Consider the table and footnote **: "New increases include 0.25 percent rate increase and decrease in dependent exemption credit." So deflation accounts, for the lowest row in the table for a $4 increase; there's an additional $33 increase. It scales up from that, but the deflation-driven "increase" << new taxes/decreased exemptions in most cases.

[Winterblues]

6. I used to think California was a Progressive State but I now know otherwise.

:shrug: I guess they voted for what they have so it is their choice.

[high density]

7. Pay more with deflation?

So, umm... will they give tax cuts when inflation kicks in?

[msongs]

8. deflation??? there are NO prices going down on anything we buy in our household nt