California voters approve retroactive increase in personal income tax rates, impact on withholding remains unaddressed

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On November 6, 2012, California voters approved Proposition 30, The Schools and Local Public Safety Protection Act of 2012, which imposes a seven year tax increase on earnings of taxpayers with income over $250,000 starting in 2012. As a result of Proposition 30 (which also includes a sales tax increase), California expects increased tax revenues through 2018/2019, averaging about $6 billion annually. The additional revenues will be available for funding the State's budget, and the previous 2012/2013 planned spending reductions, primarily to education programs, will no longer occur.



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