California's wealthiest taxpayers are only group seeing income gains

California's wealthiest taxpayers are the state's only group experiencing rising incomes, a reflection of a broader national problem of growing wage inequality.

The top one-fifth of the state's 15.5 million taxpayers — those making at least $91,000 a year — are the only ones who experienced any real income growth between 1994 and 2013, according to an analysis by the Sacramento Bee. 


That group saw their average adjusted gross incomes increase 38 percent to nearly $238,000 by 2013, from around $173,000 in 1994.

Income taxes make up more than two-thirds of the state's revenue for this year's budget, with 90 percent of the money coming from the top one-fifth of taxpayers. 

The top 1 percent of taxpayers have seen their incomes nearly double to $1.6 million a year compared with 1994's levels. 

The state's top 1 percent of filers — those with an adjusted gross income of at least $501,000 — are responsible for 45 percent of the state's income tax money.

The remaining 80 percent of taxpayers aren't faring as well and have seen their incomes either stagnate or fall over the past couple of decades, highlighting a frequently discussed issue in this year's presidential campaigns — income inequality is a growing problem around the country and is hurting the nation's middle class.

Those with average adjusted gross income in the second-fifth dropped by about 1 percent, to $66,746 from $67,507.

Adjusted gross income in the second-lowest fifth declined the most — by 9 percent — to $20,411 from an average of $22,391.

“The story has been very consistent since the mid-1980s — there are much bigger gains in earned income at the top,” said Ann Huff Stevens, an economics professor at the University of California, Davis.

“Below that, it’s been stagnant. At the bottom, there’s been a decline.

“It’s not as if we have incredibly low tax rates on the very top — they’re paying a lot,” Stevens said of higher-income filers.