Tax Day reveals many Californians are in financial trouble


Today, as millions of Californians rush to file their tax returns and claim tax creditsstate lawmakers return to Sacramento from an 11-day spring recess — and is preparing to resume negotiations on the best way to put money back in the pockets of the locals.

The two events are interrelated: the amount of tax revenue collected by the state will help determine the size, form and scope of the financial relief Governor Gavin Newsom and lawmakers ultimately agree on.

But Tax Day is also a reminder of the huge divide between California’s haves and have-nots, which the state’s progressive tax structure highlights: In 2019, the less than 100,000 Californians who earned at least $1 million paid about 40% of the state’s personal income taxes, according to data obtained by the Los Angeles Times.

By contrast, 77% of Californians who filed taxes that year reported income under $100,000 — and 50% reported income under $50,000.

the the financial precariousness experienced by many Californians was highlighted in a new poll by the Institute of Governmental Studies at UC Berkeley and the Los Angeles Times:

  • Sixty-four percent of California voters said they pay too much state and federal income taxup 10 percentage points from six years ago.
  • Forty-two percent of voters said their financial situation was worse than a year agodouble the 21% who said they were better off, compared to 2016 when about 48% of voters said they were better off financially than they were the year before, nearly double the 25% who said that they did less well.

And even though California’s tight labor market is helping some workers earn higher wages – unions representing 47,000 grocery store workers ratified a new contract on Thursday which includes their biggest salary increases in decades – a huge 8.5% increase year over year in the cost of goods is eating away at those gains.


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