Tax Calculator Understates Impact of Tax Hikes
Last week I posted a link to a calculator at the Sacramento Bee website where you can calculate an estimate of how much more you will have to pay as a result of the tax increases signed by the Governor. http://www.sacbee.com/1098/story/1627728.html A reader alerted me to some possible flaws with the calculator so I asked our chief economist at the Board to look at the calculator’s sales tax component. The conclusion is the calculator is off in two ways with respect to sales tax, the net result is it likely understates the impact on individuals. I do not believe the flaws are intentional but based on an imperfect understanding of California’s economy. I very much appreciate the Sac Bee’s efforts to make clear the impact of the tax for individual Californians and I encourage them to continue doing so. The analysis of their calculator is below. “We now know the calculator does… Read More