SACRAMENTO, Feb. 6 (UPI) -- California's combined state and U.S. income tax rate is the highest in the nation, but analysts differ on whether it will drive people out of the state.
Income over $1 million is taxed at a combined federal and state rate of 51.9 percent, as a result of new rates adopted in Washington and Sacramento. The state's top rate is 13.3 percent -- the highest in the nation and the highest for California since World War II, The New York Times said Wednesday.
Republican Texas Gov. Rick Perry bought ad time on California radio stations this week intended to capitalize on potential disaffection among business owners with the state of taxes in California.
"I have a message for California business: Come check out Texas," Perry said in the ad.
California -- the scene of a taxpayers' revolt in the 1970s that resulted in Proposition 13, severely limiting governments' ability to increase property taxes -- has managed to balance the state budget -- after years of coping with multibillion-dollar deficits -- through a combination of deep spending cuts and higher income tax rates on the wealthiest earners.
Democratic Gov. Jerry Brown told reporters this week high earners consider more than tax rates when they decide where to live and work.
"People invest their money where these big things have occurred," he said. "The ideas, the structures, the climate, the opportunity is right here on the Pacific Rim."
He said Perry's pitch is "not a serious story," The Sacramento Bee reported.
"It's not a burp," Brown said. "It's barely a fart."
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