Not only did the federal tax laws change in 2013, but so did the California tax laws.
Ah, the golden state, where all that glimmers turns to taxes. Unlike at the federal level, where our elected officials chose to increase the income and capital gains tax rates, here in my home state, the people chose to increase their taxes – or at least other people’s taxes – by passing Proposition 30.
Income Tax. California doesn’t distinguish between income and capital gains, it’s all the same for computing income taxes. Here are the California income tax rates for 2013:
[Image from tax-brackets.org]
In addition, there is a new millionaire’s tax. Those making more than $1,000,000 will be taxed an additional 1%. That’s sure to attract more millionaires to California.
Sales Tax. Californians also voted to increase the sales tax by .25% to 7.5%. This is the minimum state sales tax. Cities and counties may pile on to the sales tax, and many have. Just to name a few:
- Eureka: 8.25%
- Los Angeles: 9.00%
- Palm Springs: 9.00%
- Palo Alto: 8.63%
- Sacramento: 8.00%
- San Diego: 8.00%
- San Francisco: 8.75%
Estate and Gift Tax. California does not have an estate and gift tax separate from the federal tax. Yes, it’s true, it’s cheaper to die than live in California.