POL SCI 40 Chapter Notes - Chapter 1: Earned Income Tax Credit, Regressive Tax

• School: UCLA
• Department: Political Science
• Course: POL SCI 40
• Professor: Chris Tausanovitch

Document Summary

Tax system purpose: support public goods and services. California state and local taxes pay for: schools, public hospitals, transportation infrastructure. Califor(cid:374)ia"s lo(cid:449) i(cid:374)co(cid:373)e fa(cid:373)ilies pa(cid:455) the largest % of their i(cid:374)co(cid:373)es rather tha(cid:374) high-income. Regressive tax system: bottom fifth (avg income of ,900) = 10. 5% of income, wealthiest 1% (avg income of ,000,000) = 8. 7% of income. Lower-income pays more (in % of their income) sales and property taxes because tend to spend all on necessities. Higher-income tend to save and are therefore not subject to sales tax. Higher-income pays more % in personal income taxes. Cali"s perso(cid:374)al i(cid:374)co(cid:373)e ta(cid:454) is progressi(cid:448)e = higher i(cid:374)co(cid:373)e ta(cid:454)ed at higher rate. Most state tax dollars (total: 115. 2 billion) come from. Sales (35. 9%: corporate income only 6. 9% Most (almost all) local tax dollars come from. Tax policies that reduce the regressive tax system in california can help economic security.