Don't you just love tax coincidences?
In my post Don't hate me because I'm rich that went up earlier today, I mention state taxes targeting millionaires as part of the current anti-wealth trend.
Now I discover (thanks to TaxProf Blog) that rich Californians are going to have to live with their state's 1 percent tax on annual incomes in excess of $1 million. The extra collections are designated to fund state mental health services.
The tax, known as Proposition 63, was approved by voters in 2004. Craig and Sally Jensen challenged the tax, notes Courthouse News Service, suing to recover a portion of their 2006 state income tax.
The Jensens claimed that their equal protection rights were violated and that wealthy taxpayers were singled out while Californians with lower incomes were exempt from the tax.
The Second District Court of Appeal in Los Angeles, however, found that:
The three-judge panel even invoked populist phraseology in their decision, noting:
And more to the point, the appellate justices said the Jensens and their well-to-do Golden State peers "are mistaken in thinking that taxpayers in a particular tax bracket cannot be singled out for an income tax to benefit society at large."
There's no word yet as to whether the Jensens have enough post-millionaire-tax money to mount a further appeal.