New Study on the Impact of Prop. 30
The Pacific Research Institute, a non-partisan, non-profit think tank, today released a study on the effects of Prop. 30 on the state’s economy. “The Seven Lean Years: The Economic and Fiscal Consequences from California’s Proposition 30” was authored by Wayne Winegarden, Ph.D, a senior fellow at the Pacific Research Institute. According to Dr. Winegarden, Prop. 30 increased the progressivity of California’s tax code, created additional budget rigidity, and decreased the incentives to work, save, and invest in the state.
Prop 30 (officially titled “Temporary Taxes to Fund Education”) raised the sales tax by one-quarter of 1 percent (from 7.25 percent to 7.50 percent) for four consecutive years. It also increased the marginal income tax for seven years for single filers who earned more than $250,000 a year from 9.3 percent to 10.3 percent. Beyond $250,000, the rates increase based on the level of income, with the highest rate at 13.3 percent for taxpayers who earned more than $1 million. Continue reading