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How much do you and your neighbors pay in state taxes?

Palo Alto among state's highest contributors to California's coffers

A CalMatters analysis found Palo Alto is one of the top 25 wealthiest communities that made paid the largest sums to the state in their 2018 tax filings. Image courtesy CalMatters.

Think you pay too much in state income taxes? You'll be surprised to find out how much Palo Alto residents owed, with one ZIP code sending an average $111,415 to Sacramento.

The state's Franchise Tax Board breaks down personal income tax collections and total tax liability by ZIP Code. For the 2018 filing year, CALmatters took one step further: We've figured out, for each of those areas, what the typical tax filer made and paid.

There are two dozen neighborhoods in California where the average tax filer reported income of over $500,000. Moreover, six ZIP Codes with at least 20 tax filings had average incomes topping $1 million.

Spoiler alert: Silicon Valley's wealthy enclaves of Atherton, Los Altos, Palo Alto and San Francisco top the list of highest contributors to California's coffers. The Southern California beach towns of Newport Beach and Santa Monica also pulled in big numbers for the state.

CHART: Highest and lowest contributing neighborhoods

Two of five Palo Alto ZIP codes fell under the top 25 highest contributing neighborhoods: 94301 (which covers downtown and Crescent Park), where the average filer made $1.03 million and owed $111,415 to the state, and 94304, where the average filer earned an average $644,127 and owed an average $57,377 to the state.

In ranking the highest and lowest contributing neighborhoods, we filtered out ZIP Codes with fewer than 20 tax returns. That's because some areas have a lot of commerce and very few returns, distorting the overall picture.

Take for example, the top slot, which went to a block in Burbank that is home to The Walt Disney Studios. Ten tax returns were filed for the 91521 ZIP Code with an aggregate income of $77.3 million, which works out to an average income of $7.7 million per filer. The average tax paid? $947,200 per filer, which isn't entirely representative.

Similarly, just 10 returns came from the ZIP Code encompassing the Pasadena campus of defense contractor Parsons Corp. with a total income of $16.5 million, which works out to $1.65 million per filer. The state of California collected $1.8 million from those 10 filers, which works out to $178,600 apiece.

Coincidentally, the engineering firm went public on the New York Stock Exchange on Wednesday with an opening IPO price of $27 per share. It might be worth checking back on the 91124 ZIP Code next year to see how the executives did on their capital gains.

But among ZIP Codes that are clearly residential, the 94027 area of Atherton placed first with an average income of $1.7 million. That was followed by 94023 in Los Altos with a $1.64 million average.

On the other end, the 95229 pocket of Vallecito known as Douglas Flat in Calaveras County averaged $91 in taxes paid, the lowest in the state. The sparsely populated town has roots going back to the Gold Rush and is registered as a historic landmark. The other area that came in under $100 is the 93410 area of San Luis Obispo, which is mostly occupied by a private school campus.

Filtering out the more isolated communities, inland and Central Valley communities tended to earn less.

Taxpayers in the unincorporated community of Mecca on the Salton Sea in Riverside County, as well as the community of Huron, which seasonally swells with migrant farmworkers, and parts of Fresno in Fresno County contributed between $112 and $177 on average. There were 98 ZIP Codes where the average tax was less than $500.

Find out how much you and your neighbors paid through this map.

CALmatters.org is a nonprofit, nonpartisan media venture explaining California's policies and politics. Read more state news from CALmatters here.

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Comments

9 people like this
Posted by Neal
a resident of Community Center
on May 14, 2019 at 6:54 am

Neal is a registered user.

I'm sure a politician will soon declare that Palo Alto residents don't pay their fair share.


33 people like this
Posted by Upside down by my ankles
a resident of Another Palo Alto neighborhood
on May 14, 2019 at 8:18 am

What is more interesting and critical at this point in time is to know how much those at the bottom of that range pay and how much the recent tax changes at the federal level bumped their taxes. Coincident with the federal tax changes, which gave a huge break to the richest, was a life-altering tax increase to anyone who struggled bver decades to get into a home in the Bay Area. Not surprisingly, the market also slowed, and hardest hit was actually the starter home segment (contrary to past patterns).

The tax changes didnt just advantage the rich, advantaging real estate investors and speculators, they suddenly disadvantaged those at the bottom who own a home as their only investment and the only way to stabilize costs in this perpetually expensive area, and made it so that those at the top could pick off some relative bargains from those whose lives were suddenly upended.

This only in expensive parts of the country where real estate is highest and the best investment for investors/speculators to turn a profit by shaking down those at the bottom. The limit of $10,000 on state and local tax deductions put the screws to people just in expensive blue states where the cost of living can be five times what it is in most of the rest of the country. This tax change resulted in seriously unequal treatment under the law, and should have resulted in lawsuits. But the way of thinking in both parties seems to be that billionaires deserve breaks and anyone trying to escape the lowest rungs and live their lives should be excoriated for it, portrayed as a richy rich or undeserving, and pushed out of their hard won homes for the profit of the 1%.

For the record, lots of ordinary people own homes in Palo Alto and the Bay Area, the market is just not like the rest of the country where you go out and buy a hone at market prices based on your salary (it’s more decades of commuting from far away, spending all your time in pursuit of, living in while rehabilitating substandard housing, and working up).

I already know we have a lot of billionaires, I know it every day in how they are raising costs, pushing out retail, and destroying what was a nice easygoing place to live. What’s happening to those at the bottom who pay $20,000/yr in property taxes, $60,0000 in mortgage, and who only live on about $20,000/yr outside of housing costs and taxes, when they suddenly lost $40,000 in deductions?


30 people like this
Posted by repeal "Tax Cuts and Jobs Act"
a resident of St. Claire Gardens
on May 14, 2019 at 9:59 am

Billionaires and corporations made out like bandits, thanks to you-know-who.

I already have a problem when I like a politician and want to support him - I swore to never support financially or vote for someone who voted for Iraq (all Republicans and some centrist Dems like DiFi.)

Now I have to add to the list any politician that votes for anything DJ Trump wants. He has destroyed the GOP for some of us (actually, the GOP destroyed themselves when they decided to support the world's biggest liar.)

Repeal the last tax plan. It created no jobs. It enriches billionaires.


4 people like this
Posted by TorreyaMan
a resident of Palo Verde
on May 14, 2019 at 10:18 am

TorreyaMan is a registered user.

The data are useless if they mix residential with business, schools, etc.


8 people like this
Posted by Dan
a resident of Midtown
on May 14, 2019 at 10:28 am

Q: How much do you and your neighbors pay in state taxes?
A: Too much! ... especially with the state government falling all over itself with all kinds of plans for how to spend even more.


37 people like this
Posted by Anonymous
a resident of Greenmeadow
on May 14, 2019 at 10:48 am

Average is such a meaningless statistic... Jeff Bezos and I have an average net worth of $75 billion.


19 people like this
Posted by Jodhpurs
a resident of Woodside
on May 14, 2019 at 12:36 pm

It's criminal that they took away salt deductions and gave away trillions to billionaires.


2 people like this
Posted by chris
a resident of University South
on May 14, 2019 at 12:53 pm

These numbers are all personal tax returns; it is not mixing business.

The average is heavily influenced by very high earners including stock options. In 94301, the median would be much lower. The numbers do exclude a significant number of people whose incomes are too low to require filing.


2 people like this
Posted by Michelle
a resident of Crescent Park
on May 14, 2019 at 1:09 pm

Mark Zuckerberg lives in 94301.


2 people like this
Posted by musical
a resident of Palo Verde
on May 14, 2019 at 1:13 pm

Relax. The 1 percent pay half our California personal income tax total.
Your tax would double without them.


20 people like this
Posted by Upside down by my ankles
a resident of Another Palo Alto neighborhood
on May 14, 2019 at 11:00 pm

@musical,
Your comment has no bearing on this situation. My taxes (federal and state) are approximately six times what they were last year, before that tax changes, and I did not get six times the income or even half that. My quality of life here has substantially tanked in the last ten years because of the billionaires who want to live here because Steve Jobs did, I guess. The billionaires-can choose where they live, my mobility and choices are far more limited. They can live in Woodside where they dont create as many ills from wealth disparity. Especially with all the money they got back from millions of less wealthy Californians being picked off at the bottom rungs of homeownership.


Like this comment
Posted by Do the math
a resident of Jordan Middle School
on May 14, 2019 at 11:55 pm

Anyone whose taxes increased 6x despite the additional 12k of standard deduction is one of the 1%. As are those paying 60k per year in interest (unless, like Trump, they leveraged themselves so much that they are at risk of bankruptcy if the economy hiccups).


1 person likes this
Posted by musical
a resident of Palo Verde
on May 15, 2019 at 1:18 am

This article is about State taxes. Nowhere did I see Federal mentioned.
I doubt any other states feel sorry for Californians.
We're all welcome to leave as infinite others are lined up to take our place.


5 people like this
Posted by Resident
a resident of Old Palo Alto
on May 15, 2019 at 6:58 am

I don't think a couple of my neighbors are paying enough.
Both are running businesses out of their homes.
One of them is making a substantial amount of money. Probably well over 50K a year - which I could calculate from the number of people coming over to her home, and the rates she charges. It's been going on for years.
Another neighbor is planning on reporting her business and the other one to the Franchise Tax Board. Another neighbor told me if they are caught, they will likely plead that they were simply unaware of our laws.

If anyone else is interested, here is the link to report suspected violators.

Web Link

Web Link


12 people like this
Posted by Curmudgeon
a resident of Downtown North
on May 15, 2019 at 12:13 pm

"(actually, the GOP destroyed themselves when they decided to support the world's biggest liar.)"

Not destroyed. It's got a huge reservoir of zombies in its Base who have a long-proven record of supporting their own exploiters. The establishment GOP fell in line when it smelled money.


10 people like this
Posted by Just Say NO To Further Taxation
a resident of Barron Park
on May 15, 2019 at 2:44 pm

State taxes should be abolished by a referendum. Others US states do not have state income taxes or state/local sales tax.

CA could and should do the same.


4 people like this
Posted by Upside Down by my Ankles
a resident of Another Palo Alto neighborhood
on May 23, 2019 at 11:37 pm

@math,
You are wrong, and I resent your attempt to make light of this serious attack on the normal lives of millions of Californians.

A little more income, losing tens of thousands in deductions, crossing various thresholds, and suddenly we’re paying tens of thousands more in taxes — far more than the property taxes.

You have no idea, no one is paying any attention because of jack@sses like you trying to make stuff up to gloss over the idiocy that suddenly picked up millions of us by the ankles and shook us for everything we have to pay for more tax breaks for those who don’t need them.

Did everyone see this article: Low-income students are being taxed like trust fund babies Web Link
"A little-noticed provision in President Trump’s sprawling new tax law is treating middle- and low-income college students as if they are trust-fund babies, taxing sizable financial aid packages at a rate first established 33 years ago to prevent wealthy parents from funneling money to their children to lower their tax burdens.”

And that isn’t the half of it.

I don’t need anyone to “feel sorry” for Californians. I need California lawmakers to look at what’s actually happening to people on the lower rungs because of this UNEQUAL TREATMENT UNDER THE LAW and fix it.

We have an administration controlled by a party that is not only oblivious to what life is like for the rest of us, they are engaging in class warfare and claiming the opposite (including with the Republican tariffs, i.e., the import TAXES — which are being paid for by ordinary Americans — why aren’t they being called “import TAXES” because even this month I heard on article that had to define what tariffs are since most people have no idea!).


Speaking of being oblivious, @math, if you think you are right, how about you put your money where you mouth is?

Using the cost of living calculator for Best Places (one of the more well-supported ones), if you make the federal poverty level for a family of three, $21,000, in Chattanooga, TN, you would have to make ~$140,000 in Palo Alto to have the same quality of life.

The median household income in Palo Alto is $137,000/yr. It’s hard to make an exact correlation since things don’t exactly scale, and the market is so different here than elsewhere, but it really puts the strain on families in the area in perspective.

How much you have to earn to be in the top 1% in every state.
In California, that's
Web Link
$514,694

So I tell you what. You think my family makes anything close to $514,694, or even half? How about if you are wrong, you offer to pay the difference between my family’s income and $514,694? Or how about you offer to pay the difference between my family’s income and half of that? We could both go to an independent arbiter, like Bill Johnson at the Weekly.

But please put the money in a trust, so it comes in installments since it will otherwise all be taken away because of the weird traps in the new tax code that hit homeowners on the lowest rungs in California as hard as the low-income students with scholarships and hand all the advantages to already-rich investors.



14 people like this
Posted by R Lancelot
a resident of Greater Miranda
on May 24, 2019 at 8:09 am

Amazon paid zero in fed taxes last year.

Trump's tax cut for billionaires and corporations has to be repealed. Bush's tax cuts for millionaires and billionaires (lowering cap gains) has to be repealed as well.


1 person likes this
Posted by musical
a resident of Palo Verde
on May 24, 2019 at 10:54 am

Lower Federal taxes allow more slack for higher state taxes. California could really clean up if we wanted to. How high could Sacramento go before individuals or businesses are driven out of state? Why should the rest of the country subsidize California taxes by letting them be deductible? I don't see Federal taxes deductible against California income tax.


5 people like this
Posted by Upside Down by my Ankles
a resident of Another Palo Alto neighborhood
on May 24, 2019 at 1:07 pm

@musical,

You are forgetting that the federal government is allowing state taxes to be deductible. There is a $10,000 cap. But $10,000 is not the same thing in Tennessee as it is in California.

There are cost of living differences, and in order for the law NOT to treat people unequally, the cap should have a cost of living multiplier.

You also forget that in areas with higher costs of living, gross salaries are also higher and hence people already pay higher federal taxes. People should not be treated unequally under the law, especially in a way that grossly advantages real estate investors and instantly sets them up to get some bargains at the expense of those struggling the most.


5 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on May 24, 2019 at 1:27 pm

Posted by Just Say NO To Further Taxation, a resident of Barron Park

>> State taxes should be abolished by a referendum. Others US states do not have state income taxes or state/local sales tax.

I hate to break it to you, but, 45 states of out 50 have sales taxes, and 45 have income taxes (New Hampshire likes to pretend that it doesn't, but, it does, and, it has high property tax). Every state has property taxes. Total tax burden in California including all taxes at all levels used to be almost exactly average for the US (older statistics: Web Link)

California is ranked #11 based on state and local alone: Web Link

California is at 9.47% on the above. Some big states aren't really that comparable (e.g. Florida). Texas is probably the most comparable, being large, lots of land/farming, etc. Total tax burden is a bit lower than California, at 8.18%.

>> CA could and should do the same.

Do the same as which state? The above links will allow you to compare. Which state would you prefer to be most like, and, why?




1 person likes this
Posted by Regression
a resident of Old Palo Alto
on Jun 2, 2019 at 7:01 am

I’m not bothered by Trump taxing more middle class. And California gas taxes are really regressive- bringing some of the tax burden down to the 99% gives everyone some skin in the game.

Now everyone will feel the pain of financial wrecks like high speed rail, the bus terminal and other multi Billion fiascos the state wastes.

It’s long past time that those who votes for waste - pay for waste.

Maybe it will bring accountability to our State when we no longer can foist the mistakes onto others.


1 person likes this
Posted by common sense
a resident of Midtown
on Jun 2, 2019 at 7:16 am

California is expected to have a $21 billion surplus:

Web Link

Instead of reducing the tax burden on the middle class, which would help with those who are hitting the SALT deduction cap, the politicians plan on spending alot of the budget surplus.


Like this comment
Posted by repeal "Tax Cuts and Jobs Act"
a resident of St. Claire Gardens
on Jun 2, 2019 at 7:45 am

"I’m not bothered by Trump taxing more middle class."

Ahhh, so you're the one. We knew there was one out there, and now we've found you. Loves giving trillions to billionaires and corporations, but yeah, not bothered with hitting the middle class (which drives the economy, fwiw.)

Okay.


"California is expected to have a $21 billion surplus... the politicians plan on spending alot of the budget surplus"

Uh, no. 'Budget surplus', by definition, is what remains after spending. Perhaps you meant 'windfall' or 'revenue'.


Repeal the Trump tax plan. It created no jobs. It enriches billionaires.


2 people like this
Posted by Regression
a resident of Old Palo Alto
on Jun 2, 2019 at 11:04 am

“...giving trillions to billionaires”

Taxes are taking money. If you’ve paid any you’d know that. Taking less is not ‘giving’.

Most spending goes to the middle class. So government is basically taking from the wealthy and spending on everyone else.

When ‘everyone else’ votes for fraud, waste and stupid shit, it’s because they don’t have to pay for it. It comes from the government, who you don’t pay. Someone else does.

The average voter would vote for far less waste if they had to pay 10% of the true cost of programs.


Sorry, but further commenting on this topic has been closed.

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