Court Nixes Challenge |to Calif. Millionaire Tax

(CN) - California's tax on millionaires' income to expand the state's mental-health services does not violate the Constitution, a California appeals court ruled.

Voters passed the tax issue, known as Proposition 63, in the 2004 election, imposing an additional 1 percent tax on annual income over $1 million.

Craig and Sally Jensen challenged the tax, suing to recover a portion of their 2006 state income tax.

The Jensens claimed that their equal protection rights were violated, and that wealthy taxpayers were singled out while Californians with lower incomes were exempt from the tax.

The trial court refused to strike the tax, and Justice Boren of the Los Angeles-based Second District Court of Appeal affirmed the decision.

"An income tax can be rationally based on a taxpayer's income level and ability to pay, and there is no need to show that a particular taxpayer personally benefits from a tax assessed for the public good," Boren wrote.

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