Gavin Newsom claims California taxes aren’t high. Here is why he’s wrong | Opinion (2025)

Gov. Gavin Newsom often claims California is not a high-tax state.

“So, this notion of even being a high tax state is B.S.,” Newsom podcasted in March. “Sixteen states tax their poorest residents more than we tax our top 1%.”

But does anyone believe that?

I mean, big if true.

But, sadly, it’s not.

First, the question of whether California is a high-tax state. The debate is usually whether the high taxes are worth it, not whether the taxes are high. Californians know what they are experiencing.

California is at or near the top of most meaningful tax rate measures. California has the highest marginal income tax rate in the country. Even if you throw all earners together and adjust for averages, which I would argue is a faulty way of looking at it, California has the second-highest income tax rate.

California has the highest state sales tax rate and one of the highest total (state and local) sales tax rates, the highest capital gains tax rate, the highest gas tax rate, one of the highest car registration fees and the 6th highest corporate tax rate.

Are there any ways California is not a high-tax state?

California has a relatively low rate of 1% for the lowest incomes. But it’s not lower than states like Florida, Tennessee, Texas, and Washington, which have zero income tax and are four of the 16 included in Newsom’s list mentioned above.

California’s property tax rate is also relatively low (thanks to Proposition 13). But when average property values are considered, California homeowners pay a disproportionately high amount of base property taxes despite the low rate. Plus, many Californians pay other supplemental taxes and assessments, driving property taxes higher.

It’s really silly to debate this. If California weren’t such a high-tax state, it wouldn’t have been one of the six states that benefited the most from the ability to deduct state and local taxes on federal tax returns. Newsom and others wouldn’t have scrambled to find a workaround when the deduction was eliminated a few years back.

As for that second claim about 16 states taxing their lowest-income residents more than California taxes its top 1%? Equally preposterous.

Newsom’s claim is based on a study by the Institute on Taxation and Economic Policy that measures the tax progressivity of each state. ITEP’s study has been panned for years for having a methodology that seems to produce the results it wants.

ITEP has fixed some of the methodology issues, but it still omits retirees, which is a huge omission. ITEP does so for reasons it might find reasonable, but omitting legions of low-income taxpayers undoubtedly skews the findings. It’s like saying that if you remove all of their losses last year, the Chicago Bears actually had a pretty good season.

I reached out to Newsom about these omissions and asked if his comments meant he saw no need for tax relief for Californians. A podcast spokesperson simply directed me back to the ITEP study and two articles citing the ITEP study.

ITEP’s study also penalizes states with zero income tax as “regressive,” and includes some income support programs in its calculations. But treating these programs as a negative tax distorts the comparison by confusing government spending with tax policy.

California Democrats are partial to framing rich versus poor narratives that ask the wrong question and overlook everyone in the middle who gets taxed like a top earner but doesn’t have the income of the 1% to offset it. A more useful framing is the tax burden on the cost of living, which California would also lose.

Other states are not tax utopias, but it’s silly to argue California is not a high tax state. Sadly, relief does not appear to be on the way.

Matt Fleming is an opinion writer living in Placer County. He is a former Republican staffer and spokesperson.

This story was originally published April 21, 2025 at 5:00 AM.