California Quietly Raises State Income Tax Rate to 14.4%

TaxBuzz

The State of California has quietly raised its marginal income tax rate to 14.4% beginning in 2024.

https://img.particlenews.com/image.php?url=4byjYu_0iOpG2Q700
Credit: Gchutka (Getty Images)

Last week, Governor Gavin Newsom signed legislation that implements the change. In a recent op-ed, a Wall Street Journal writer noted:

...in 2024 California’s top marginal tax rate will increase to 14.4% from 13.3% for workers making more than $1 million. Those making between $61,214 and $312,686 would pay 10.4%. So California’s upper-middle class will pay more than millionaires in almost every state save New York, New Jersey and Hawaii.

The bill -- SB 951 -- is primarily designed to fund an expansion of the Golden State's paid family leave benefit. It removes the existing $145,600 wage cap on the state’s 1.1% employee payroll tax.

Right now, employees are eligible for a 60% to 70% wage replacement for up to eight weeks to care for a new baby or an ailing family member. As of 2025, the majority of California workers will be allowed to take home between 70% and 90% of their normal wages, with low-income families eligible for even more.

https://img.particlenews.com/image.php?url=3PtTsF_0iOpG2Q700
Credit: Slobo (Getty Images)

The marginal income tax bracket increase is, opponents say, dinging high earners who will not see much, if any, benefit from the paid family leave expansion.

Proponents, however, suggest that California's existing program has fallen behind other states and low-income workers are currently unable to take leave, leading to poor infant and maternal health among other consequences.

In an official statement released the signed the bill into law, Newsom stood behind the legislation:

“California created the first Paid Family Leave program in the nation 20 years ago. Today we’re taking an important step to ensure more low-wage workers, many of them women and people of color, can access the time off they’ve earned while still providing for their family.”

https://img.particlenews.com/image.php?url=2d0MV2_0iOpG2Q700
Credit: David Sucsy (Getty Images)

The Democratic Governor recently faced backlash due to his opposition of Proposition 30, a measure that would raise taxes on Californians earning over $2 million a year.

What do you think about this quiet tax bracket increase for high-income California residents? If you have questions about how this could impact you, match with a qualified tax expert today.

You Might Also Enjoy:

- California Experiences Financial Red Flag as Tax Revenue Falls

- United States' Debt Hits Record High, Surpasses $31 Trillion

- California Residents Can Expect Inflation Relief Checks as Soon as Oct. 7

Comments / 588

Published by

TaxBuzz.com is a service of CountingWorks, Inc., a privately-held technology firm in Newport Beach, CA. TaxBuzz is a free directory service allowing consumers to connect with local CPAs. The TaxBuzz blog offers comprehensive resources for tax questions.

Newport Beach, CA
16K followers

More from TaxBuzz

Comments / 0