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The number of Californians reporting incomes of more than $1 million increased sharply last year, as did their share of the income stream, a new report from the Franchise Tax Board reveals.

The new data will fuel the political debate over whether high-income Californians should pay higher taxes.

There were 10,000 taxpayers in the million-dollar income club during the 2009 tax year -- just one-third of one percent of all returns -- but that number jumped 27 percent to more than 13,000 for 2010, based on tax returns filed in 2011.

The income millionaires reported adjusted gross incomes of $22.4 billion in 2009, an average of $2.2 million each. In 2010, the total jumped 30.2 percent to $29.1 billion, with the average remaining virtually unchanged.

Those increases were by far the largest of any income group, the FTB said, while that group's share of all adjusted gross income increased from 3.7 percent in 2009 to 4.5 percent in 2010, while its share of taxes jumped from 9.5 percent to 11 percent.

The top 1 percent of income taxpayers, about 140,000 returns with incomes averaging $1.1 million in 2009, saw their share of personal incomes drop sharply during the recession years, from a high of 25.2 percent in 2007 to just 18.4 percent two years later. Their income tax burdens also dropped, from 48.1 percent of the state's total in 2008 to 36.9 percent in 2009 -- a decrease that hit the state budget, which is largely dependent on income taxes, hard.

The 2010 data indicate that the wealthy are rebounding, which explains the recent surge in state revenues, but how extensive that recovery will be is the source of great controversy, especially the varying revenue estimates of the Brown administration and the Legislature's budget analyst. Gov. Jerry Brown also hopes that voters will agree to impose income tax surcharges on the highest income Californians this year.



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