Lower Taxes. Simpler System. More Growth.

The Problem

California punishes work, punishes success, and makes it harder for working people to get ahead.

After 16 years of one-party Democratic rule, California has built the highest and most punitive state income tax system in America, with top rates reaching 13.3 percent.

This comes on top of sky-high housing costs, the highest gas prices in the country, and rising utility bills. Californians pay the highest taxes in the country—for some of the worst results, including high poverty, unemployment, and cost of living.

For millions of Californians, the impact is clear:

• Raises don’t go as far
• Starting a business feels riskier
• Getting ahead feels harder than it should

The more you work, the more the system penalizes you. And as a result, people are leaving California in large numbers.

Why This Is Happening

Democrats have turned the tax code into a tool for bigger and more bloated government.

Instead of keeping taxes low, simple, and predictable, they created a system with multiple brackets, high marginal rates, and constant complexity.

This has helped fund massive spending increases:

• The state budget has nearly doubled in the last ten years
• It has grown roughly 75% in the last five years

The result is a system that:

• Punishes upward mobility
• Relies heavily on a small number of high earners
• Discourages growth and investment
• Drives businesses and jobs out of the state

Steve Hilton’s Plan

Steve Hilton will reform California’s tax system to make it simpler, fairer, and built for growth, jobs, and opportunity—focused on helping workers and small businesses.

1. No state income tax on your first $100,000

Working people are being squeezed by rising costs. In many California counties, $100,000 is now considered “low income.”

Under this plan:

• If you earn less than $100,000 → you pay no state income tax
• If you earn more → your first $100,000 is still tax-free

This allows people to keep more of what they earn and removes penalties for moving up.

2. No tax on tips

Workers who rely on tips should keep them.

Currently, California taxes tips as income. This plan would:

• Eliminate state taxes on tips
• Ensure tipped workers keep more of their earnings

3. End the $800 small business tax

California charges small businesses a minimum $800 annual tax—even if they make no profit.

This plan would:

• Eliminate that tax
• Reduce barriers to starting and running a business

If a business earns nothing, it should owe nothing.

4. A flat 7.5% tax above $100,000

Instead of multiple tax brackets, the plan introduces:

• A single, simple 7.5% rate on income above $100,000

This creates:

• Predictability
• Lower marginal rates
• Incentives for growth, investment, and job creation

Fiscal Impact

Based on current estimates:

• The plan would reduce state income tax revenue by approximately $60–65 billion on a static basis
• Eliminating taxes on tips would add less than $1 billion in additional impact

This level of spending is roughly in line with California’s budget before COVID.

The plan argues that California does not have a revenue problem—it has a spending problem.

Conclusion

For years, California’s tax system has made life more expensive and made it harder to get ahead.

This plan changes that with:

• No income tax on the first $100,000
• No tax on tips
• No small business tax
• A simple 7.5% flat tax above $100,000

Pro-worker. Pro-small business. Pro-growth.

It’s about letting people keep more of what they earn. That’s how you make our state Califordable.