AB 1253 (Santiago) is not law yet, but if enacted the bill would impose the following additional taxes retroactively for taxable years beginning on or after January 1, 2020:
- 1% on income over $1,181,484, but not over $2,362,968;
- 3% on income over $2,362,968, but not over $5,907,420; and
- 3.5% on income over $5,907,420.
These increases would mean the California tax rate on income over $1 million would go from 13.3% to 14.3%, and California’s maximum rate would increase to a staggering 16.8%.
Although the bill initially sets $1 million, $2 million, and $5 million as the thresholds, later in the bill those numbers are increased for inflation.
The bill is now pending a hearing in the Senate Governance and Finance Committee, and requires a two-thirds vote of both houses of the Legislature to be enacted.
To view the full text of AB 1253, go to:
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