State Disability Tax Increase
Most people won’t have noticed this, but there was a huge increase in the California state disability tax. In 2008, it was 0.8% of the first $86,698 of income. It goes up now to 1.1% of the first $90,669 of income. The maximum annual cost will increase from $693.58 to $997.36, a 44% hike.
Even if someone makes less than the maximum, they’re going to take another $3 out of every thousand of pre-tax income. Pretty soon this adds up to real money.
And they do this every time. In 2004, SDI went up by 58%, and they raised it again in 2005. Arnold cut the tax after that, but it’s back now as high as ever. Anyone want to bet the money goes anywhere near the Disability pool?
I’m having a bad financial year. My salary went down by 5%; my tuition went up by 5%; my company stopped matching my 401k contributions; the state increased my income tax and the disability tax.
I’m better off than many people including most of my classmates, but the economy is leaving me feeling squeezed.
Comment by aphrael — 6/9/2009 @ 8:32 am