Punishing Californians by Raising their Taxes is the Worst Idea of All
Rumors abound that there is progress on a budget deal. Unfortunately, if the rumors are true, such progress involves major tax increases: A once cent hike in the Sales and Use tax, an across the board income tax hike, a gas tax increase, and a higher vehicle license fee.These are all bad ideas.
The sales tax is a destructive, unfair tax. America is becoming a service oriented economy to such a degree that the sales tax no longer works. Raising this tax makes an unfair situation for retailers worse. Look around at just about any strip mall in California and you will see storefront after storefront that is the former home of a failed retail business. This is the devastation wrought by the combination of a recession mixed with a high tax. The rumored budget deal proposes to hike the state’s portion of the sales tax from 5 percent to 6 percent. This is a 20 percent increase in the state rate. This will suppress consumer demand, and/or divert it to online vendors. In many jurisdictions it would take the overall rate to 10 percent. This would be a catastrophe for our retailers.… Read More