California Budget Relies Heavily on Surging Tech Stock Revenue
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Tech companies like Apple, Google, Meta, and Nvidia paid over $5 billion in stock option withholding taxes to California last year, making up over 6% of the state's income tax revenue. This share has quadrupled over the past decade.
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Withholding taxes from tech stock options are volatile but have helped offset fewer IPOs recently. If AI leads to further stock gains, California tax revenue may continue to benefit.
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Software developers in CA earned about $49 billion last year based on average salaries near $190k. This exceeded the state’s total personal income tax revenue.
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CA has 1.4 million tech jobs now, 76,000 more than pre-pandemic, despite layoffs. Areas like AI, EVs, and cleantech may drive future growth.
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The top 1% of CA earners, mostly in tech, contributed half of all personal income tax revenue in 2021, making the state budget reliance on tech a risk.