Tax hike on California millionaires would create 54% tax rate

A proposal to raise taxes on California millionaires would result in a top tax rate of nearly 54% for federal and state taxes.

Democrats in the California state legislature this week proposed a tax hike on the state’s highest earners to help pay for schools and services hurt by the coronavirus pandemic. Legislators say the tax hike would raise more than $6 billion a year, and would redirect funding from the wealthy to those who have been hit hardest by the Covid-19 crisis.

The plan follows proposals in New York state to raise taxes on the wealthy to pay for a widening budget deficit. And it adds to a growing debate over expanding inequality during the pandemic and who should pay the soaring costs to government.

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