Proposition 30, which was a merger of two previously competing initiatives: the ‘Millionaire's Tax’ and Brown’s First Tax Increase Proposal, passed. however.
Prop. 30 includes these highlights:
• Raises California’s sales tax to 7.5% from 7.25%, a 3.45% increase over current law. (Under the Brown Tax Hike, the sales tax would have increased to 7.75%)
• Creates four high-income tax brackets for taxpayers with taxable incomes exceeding $250,000, $300,000, $500,000 and $1,000,000. This increased tax will be in effect for 7 years.
• Imposes a 10.3% tax rate on taxable income over $250,000 but less than $300,000—a percentage increase of 10.6% over current policy of 9.3%. The 10.3% income tax rate is currently only paid by taxpayers with over $1,000,000 in taxable income.
•  Imposes an 11.3% tax rate on taxable income over $300,000 but less than $500,000—a percentage increase of 21.5% over current policy of 9.3%.
• Imposes a 12.3% tax rate on taxable income over $500,000 up to $1,000,000—a percentage increase of 32.26% over current policy of 9.3%.
• Imposes a 13.3% tax rate on taxable income over $1,000,000—a percentage increase of 29.13% over current ‘millionaires tax’ policy of 10.3%.
If this proposition is passed in November, 2012, the income tax will apply retroactively to all income earned or received since the first of the year.
Based on California Franchise Tax Board data for 2009, the additional income tax is imposed on the top 3% of California taxpayers.