SACRAMENTO, Calif. — California has the highest personal income tax rate in the country at 13.3 percent, and with COVID-19 disproportionately impacting low-income communities, some state legislators said rich Californians should pitch in a little more. One Southern California assemblyman is proposing a so-called ‘millionaire tax,’ which he said would create revenue for schools and boost the state’s economic recovery.

What You Need To Know

  • At 13.3 percent, CA has the highest personal income tax rate in the country

  • As COVID-19 disproportionately impacts low-income communities, state legislators say rich Californians should pay more

  • SoCal assemblyman Miguel Santiago is proposing a "millionaire tax"

  • Santiago has seen families in his district, which encompasses DTLA, Boyle Heights, and Koreatown, suffering

Assemblyman Miguel Santiago, D-Los Angeles, who represents Downtown L.A., Boyle Heights, and Koreatown, said it’s been heart-wrenching to see the amount of families in his district suffering from the coronavirus crisis.
 
“I’ve seen people who are so desperate and waiting for hours in line for grocery baskets that you know that they would want to get back to work, and you know they’re desperate to feed their kids,” Santiago said.
 
Santiago volunteers at food banks every weekend, where he talks to families who have lost their jobs and are unsure how they’ll provide the next meal for their kids.

 “It’s time for people who are doing very well to step up and help the rest of the 99.5 percent of the people who are not,” Santiago said.

The L.A. legislator is proposing a 1 percent tax hike on incomes over $1 million, 3 percent on earnings over $2 million, and 3.5 percent on households that make more than $5 million. Santiago said the new revenue would be invested in schools and other government services, such as health care and unemployment benefits.

“This is the house of ideas, this is where we debate ideas, and so I think it’s appropriate that we include this idea in the debate. I think it’s a good step forward,” Santiago added.

However, Republican State Senator John Moorloch, R-Costa Mesa, believes the millionaire’s tax would hinder economic growth.
 
“We already have the highest personal income tax rate in the nation – that may be a disincentive of all people moving to California,” Senator Moorlach said.

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Other opponents of Assembly Bill 1253, such as the California Taxpayers Association and the Family Business Association, fear it would drive out the Golden State’s richest residents.

“This idea that people are going to pick up and leave California because they got to pay 1 percent more. I just don’t buy that,” Santiago said.

Instead, Santiago sees the bill as an opportunity to set the tone for what he refers to as a better California.

So far, AB 1253 is backed by some of the state’s largest labor unions, educators, environmental groups, and a handful of Democratic legislators. However, it is not scheduled for a vote this legislative session due to time constraints caused by COVID-19.