Should the state of California increase taxes or make cuts?
There is no easy solution. California actually already has the highest state income tax rate in the nation at 9.3% for someone making about $50K a year…the next closest is Rhode Island at 7.75% for a similar amount, and the average state income tax is about 4-5%. So you can see why the government is reluctant to raise it even more. Property taxes…A large part of what got the state into this mess in the first place was the passing of Proposition 13 in 1978. When housing prices ballooned about 6-7 years ago, the state was very limited in the amount of tax it was allowed to collect on the suddenly increased property values, yet was required to support a huge influx of people, and in some cases even businesses, inhabiting that same property. Then when the housing market crashed, the state was left stuck with a huge bill, and had no more credit to borrow on to finance it. In fact, this same proposition also increased the required vote for a any new taxation law from simple majority to 2
