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:
WALTER AND JOANN RODRIGUEZ: Lower Middle (Next 20%) $9,001 to $17,000
AGES: 27 and 26
WHERE: North Hills
JOBS: Walter is a computer analyst for a Santa Monica title insurance firm. JoAnn manages the apartment building where they live.
1992 INCOME: $17,000, plus free rent of $575 a month
1992 STATE AND LOCAL TAXES: $658
VIEWPOINT: “When you’re rich, you get one deduction after another.”--Walter Rodriguez
Walter and JoAnn Rodriguez live in a two-bedroom apartment in the San Fernando Valley building they manage in return for free rent; the arrangement allows JoAnn to be a stay-at-home mom for their 7-year-old son, Bryant.
Even so, it’s not easy getting by on Walter’s $2,000-a-month salary as a computer analyst for a Santa Monica title firm. He has a system to ensure that there is at least $20 in the checking account to pay for gasoline to get to work at the end of each month.
The childhood sweethearts worry that their neighborhood--where JoAnn grew up--is steadily deteriorating. Gangs and drug dealers make it increasingly unsafe.
Yet, they cannot afford to move.
“We just get by,” Walter says. And tax-wise, he adds, “we’re getting penalized because we don’t earn enough to own a house. . . . Someone who makes double what I do can buy a house and then they get a tax break. It’s unfair.”
The Rodriguezes do not think of themselves as poor, and they consider themselves better off than many of the tenants in the building they manage.
But they do not think of themselves as middle class either. And they believe the rich do not bear their fair share of the state’s tax burden.
“They get subsidies left and right. They have all kinds of write-offs. They can pay clients to get business and then write it off,” Walter complains. “It happens all the time. I’ve seen it. They have lawyers who can show them the tricks. Even if they’re audited, they just pay, and it doesn’t matter that much to them.”
JoAnn says she has sent dozens of pencils to school with her son and purchased paper and other supplies for use by his class. She does not blame the school system, but wonders why the schools do not seem to have enough money to provide a decent education in uncrowded classrooms.
WHAT THEY PAID:
State Income tax: $153
Property Tax: $0
Estimated sales tax: $505
State and Local Taxes as a Percentage of Income: 3.8%
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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.
