Municipal Bond Forum
Effective tax rate of California
Q
When I hovered over California on your tax map, it showed 50.83% as the top total income taxes. Are you aware that the top state tax rate in California is 13.3%? If you add 39.6% federal and 3.8% tax on top of that, you get 56.7%.
A
James A. Klotz responds:
Yes, the top California state tax rate is 13.3%.
However, state tax payments are deductible from federal income tax, which lowers the effective net rate to 50.83%, as displayed on our map.
Please consult your accountant or tax preparer regarding your specific situation.
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