Top Marginal Tax Rate Now Exceeds 50% in California, New York, and Hawaii

Gerald T. Prante and Austin John (both of Lynchburg College, School of Business and Economics) have updated their paper, Top Marginal Effective Tax Rates by State and by Source of Income, 2012 Tax Law vs. 2013 Scheduled Tax Law, to reflect the passage of the American Taxpayer Relief Act of 2012:

This paper compares state-by-state estimates of the top marginal effective tax rates (METRs) on wages, interest, dividends, capital gains, and business income for tax year 2012 to the rates enacted into law for 2013 by the American Tax Relief Act of 2012 (ATRA). Overall, the average top METR on wage income increased by approximately six percentage points (41.8% to 47.9%), while taxes on dividends and capital gains increased by an average of 9.4 percentage points. The top METRs on wages, interest, and partnership/sole proprietor income now exceed 50% in California, Hawaii, and New York City.