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Blog Post · April 18, 2023

Most Californians Believe They Are Overtaxed by an Unfair System

photo - Couple Working on Taxes at Home

For most Americans, today is the deadline to file individual income tax returns, although most California residents have been granted a filing extension due to the recent devastating winter storms. As Californians prepare and complete their returns, how are they feeling about the current state and local tax system?

Overwhelming majorities of adults (71%) think California ranks near the top or is above average in terms of state and local tax burden per capita versus other states, according to the most recent PPIC Statewide Survey—similar shares have held this view since 2018.  California’s tax system is complex but this perception is somewhat in line with the fiscal facts: the Tax Policy Center reports that California’s state and local tax collections per capita in 2020 were the eighth highest in the nation.

With that in mind, it is unsurprising to find seven in ten residents feel they are paying more than they should in state and local taxes—the highest share since PPIC first asked this question 20 years ago, with 31% saying they pay much more. Twenty-six percent believe they are paying the right amount, while 4% think they pay less than they should.

There is rare partisan agreement on the issue. Solid majorities across partisan groups say they pay more than they should—although Republicans (56%) are far more likely than Democrats (22%) and independents (22%) to say they pay much more. Solid majorities across regions as well as demographic groups feel they pay more, and the shares saying they pay much more increases with rising income levels (25% less than $40,000, 29% $40,000 to $79,999, 34% $80,000 or more).

Dovetailing with views about state and local taxes, majorities (57%) of Californians believe the present state and local tax system is not too fair (38%) or not at all fair (19%); 39% think it is moderately fair, and 3% say it is very fair. More adults felt the system was not at all fair last March (29%), but overall views were similar in that 58% said it was either not too or not at all fair.

While partisans agree that Californians pay too much in taxes, they disagree on the fairness of the tax system. Republicans overwhelmingly say the system is not fair and solid majorities of independents say the same; in contrast, about half of Democrats say it is fair. Majorities across all regions and demographic groups believe the system is not fair. This perception is highest among African Americans and those living in Los Angeles.

Californians are divided on whether they would rather pay lower taxes and have the state government provide fewer services (52%), or pay higher taxes and gain more services (45%). Partisans are sharply divided on this issue: Democrats prefer higher taxes and more services (63%) while most Republicans (90%) and independents (54%) prefer lower taxes and fewer services. As prices for everyday goods remain high, and with talk of a recession on the horizon, will residents’ tax preferences change? Stay tuned as PPIC continues to monitor Californians’ views on taxes and fiscal matters.

Topics

Political Landscape Statewide Survey taxes