We, The Taxpayers

California’s arcane system of state and local taxes hits every household differently. To gauge the bite, The Times asked a cross-section of Southern California residents to pull out their tax returns and talk about the system. To make it easier to compare these tax bills to your own, the stories are color-coded with the charts shown here, which provide several measures of tax bite and after-tax wealth.

Income Groups Defined: Using Franchise Tax Board data for 1970, 1980 and 1990, The Times divided tax-paying households by income into five groups of equal size. In 1990, the groups were defined this way:

PAUL AND JUDY SCHMIDT: Upper (Top 20% of earners) $50,001 and Over

AGES: 57 and 54

WHERE: Long Beach

JOBS: College professor and bookkeeper

1992 INCOME: $60,000

1992 STATE AND LOCAL TAXES: $2,720

VIEWPOINT: “I think Prop. 13 should be changed to eliminate the restrictions it imposes on raising taxation. . . . I believe in majority rule and not minority deadlock.”--Paul Schmidt

Along his tree-lined street, Paul Schmidt sometimes gets in arguments about taxes with his neighbors, many of whom have lived here even longer than the Schmidts’ 20 years.

The others wind up shaking their heads, convinced he is the Nutty Professor come to life.

The reason? “I think taxes are too low,” Paul Schmidt says. “I would be willing to pay more.”

Sure, he adds quickly, “I get paid by the taxpayers.” But it’s clear that his views cannot be traced simply to his job in the political science department at Cal State Long Beach. For the Schmidts are classic, unabashed liberals who believe in activist government and its ability to do good.

“I was born under the star of Franklin Roosevelt,” Paul Schmidt says.

Though he has benefited from Proposition 13, he opposes it as public policy and considers its two-thirds requirement for approving new taxes to be unfair and undemocratic.

He is also disappointed with popular sentiment for the sales tax, “which is a regressive tax,” over other levies. “If people perceive taxes to be low, they perceive them to be fair,” he says. “People have always thought of the sales tax as ‘Oh, it’s only a few pennies.’ But it’s not a few pennies anymore.”

He has given more thought than most taxpayers to such issues. Several years ago, Schmidtnoticed that there were no courses on taxation being taught at his college, so he began one in taxation and budgetary policy.

“My goal is to make people understand that . . . taxation and budgetary policy is ultimately political, and not economic.”

Clearly, these are not your average materialists. “We spent all of our money putting our kids through college,” Schmidt says without complaint. (They have a son, 25, and a daughter, 22.) He believes tax rates could be raised for the wealthy and belittles the notion that high rates drive businesses away from the state.

“I think the idea of businesses leaving California is pretty much a myth,” he says, “and that taxation is a minor factor in business relocation decisions.”

WHAT THEY PAID

State Income Tax: $1,764

Property Tax: $556

Estimated Sales Tax: $845

State and Local Taxes as a Percentage of Income: 5.3%

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Data analysis by Richard O’Reilly, Times directoy of computer analysis, and Times researcher Nona Yates from Franchise Tax Board, California Department of Finance and State Board of Equalization data.