A Billion Dollars Arrive on April 15

They may have been procrastinating, but California taxpayers came through on April 15th as they paid $1.0 billion in estimated and final tax payments. With refunds and withholding taxes for the day offsetting each other, net personal income tax (PIT) receipts also equaled $1.0 billion.  This compared with last year's April 15th figure of $850 million.

Yesterday's tax surge put the State's cash tally in terms of its three major revenue sources -- PIT, corporate income, and sales taxes -- at about $67.7 billion for the fiscal year to date (July 1, 2013 through April 15, 2014). This is $1.6 billion more than projected based on the Governor's Budget released in January.

PIT is running about $1.0 billion, or 2.2%, above projections. Corporate tax revenues are more than $700 million, or 16.8%, above expectations. Retail sales are the only category still behind forecasts, although the 0.7% miss amounts to only about $100 million.
 
Also worth noting: Taxpayers pay a rising tax rate on incremental increases of income. Because of the rising rates, high-income taxpayers will not pay the topmost tax rate on all their income today. Consider for example, the effective tax rate paid in 2011 by the 671,290 taxpayers with adjusted gross incomes above $200,000.(Note: 2011 reflects a tax year prior to the imposition of the Proposition 30 levy.) Of these high-income taxpayers, 334,834 (50 percent) paid at a tax rate between 5.0 percent and 6.9 percent. Another 228,388 (34 percent) paid between 7.0 percent and 8.9 percent.  Fewer than 25,000 taxpayers (4 percent) paid at a tax rate exceeding 8.9 percent. At the other end of the scale, 83,549 high-income taxpayers (12 percent) paid a tax rate of between 0.0 percent and 4.9 percent.