Proposition 30 was passed on Tuesday carrying about 54% of the vote. Here's what it means.
There will be an across the board sales tax increase from a base rate of 7.25% to 7.5% for the next four years. This will have an impact on all consumers.
In addition, there was a significant increase in marginal rates for those making more than $250,000, which will be retroactive to the beginning of 2012 and last for seven years.
Under Prop 30 the new brackets for single filers will look as follows:
In excess of $250,000----10.3% (up from 9.3%)
In excess of $300,000----11.3% (up from 9.3%)
In excess of $500,000----12.3% (up from 9.3%)
Proposition 30 will keep California in first place for having the highest state sales tax in the nation and should move California from second (behind Hawaii) to first place in state income tax.
The biggest question I have, however, is will this seven year "temporary" tax increase be enough or will Governor Brown and his new super-majority legislature push for additional tax increases. Also, is Proposition 13 also soon to be on the chopping block? Time will only tell.