By, Maria Aguilar |Staff Writer|
Personal income tax rates will rise for 12 years on all who earn more than $7,316 annually if Proposition 38 passes.
Funds from the tax increase will be distributed among K-12 schools, early childhood programs and state debt, according to the official voter information guide.
Funds of 60 percent will benefit K-12 schools, 30 percent will contribute to fixing the state debt, and 10 percent will go towards early childhood programs, including preschool and day care. These percentages are for 2013-2017.
Revenues generated between 2018-2024 will be used to focus on education. 85 percent will go towards K-12 schools and 15 percent will be dispersed to early childhood programs.
Once these funds are in the hands of local school districts, Proposition 38 requires the school district board of directors to obtain public input on how these funds are to be used in an open public hearing.
“The PIT is a tax on wage, business, investment, and other income of individuals and families,” according to the official voter information guide.
California residents will each pay a different personal income tax increase depending on their annual income. Single residents who earn approximately $27-38,000 a year will face a 1.1 percent tax increase.
A breakdown of this tax increase can be found at www.voterguide.sos.ca.gov and select the PDF version on the left column.
Proposition 38 is not the only prop asking voters to increase the personal income tax rates. Proposition 30 plans to increase the same tax on annual earnings, however only for residents who earn over $250,000, for a seven year period.
These funds will be dispersed among K-12 schools and community colleges only.
If voters pass both propositions, the one with the most yes votes will be enforced.