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:
RANDY AND MYLENE CHOW: Upper (Top 20% of earners) $50,001 and Over
AGES: 38 and 35
WHERE: Irvine
JOBS: Accountant, legal administrator
1992 INCOME: $135,000
1992 STATE AND LOCAL TAXES: About $16,700
VIEWPOINT: “In some areas we’d be rich, but here we’re just middle class. When President Clinton defines the rich as people who make more than $75,000, that just doesn’t apply to Southern Californians.”--Randy Chow
When Mylene Chow returns to work this fall after a maternity leave, she and her husband will see their child care expenses double to $1,000 a month.
“It almost makes you wonder whether working full time pays off,” says Mylene, cuddling newborn son Colin while she watches 3-year-old Brent scamper about the back yard.
But she likes her job as a legal administrator at a Santa Ana law firm. And the Chows bought a nice house in Irvine two years ago that demands two salaries.
In 1992, the Chows qualified for $550 in federal and state child-care credits.
“That’s not enough,” Mylene complains. And the nearby public kindergarten offers no relief in the immediate future. “It lets out at 11 a.m., which doesn’t do working parents much good.”
The Chows could sum up their feelings about taxes in a few words: They pay too much for too little.
“The system does not benefit people like me,” Mylene says. “I’ve worked from the time I graduated from college. I’ve paid a tremendous amount of money into (state) disability insurance. But, knock on wood, I’ll use disability only twice in my life, for my two pregnancies. And I’ll never take advantage of food stamps or Medicaid.”
Randy believes “there are too many inefficiencies in the tax system” that allow bureaucrats to waste taxpayers’ money. “The government should hire an outside consulting firm to investigate governmental abuses,” he says. “Taxes would not have to be increased if the government would better spend what it already takes from us.”
As an accountant in Costa Mesa, Randy knows the ins and outs of tax law. Even so, he says, his family’s income provides little flexibility in unearthing tax breaks: “Rich people have ways to shelter income. I wish I could take business trips to wonderful places and write them off.”
WHAT THEY PAID:
State income tax: $7,500
Property tax: $4,200
Estimated sales tax: $5,000
State and Local Taxes as a Percentage of Income: 12.4%
*
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.
