California has become like that ne’er do well cousin who is always hitting up generous relatives for more money, while never changing their irresponsible ways. Proposition 1A, scheduled for the May election, is merely the latest example of Sacramento politicians returning to taxpayers for $16 billion in higher taxes, during a time of record high 10% unemployment, plummeting retirement account funds, record high foreclosures, and overall economic jitters, for more money to feed wasteful programs.
What’s most outrageous about the situation is that the authors of the ballot argument in favor of Prop 1A are attempting to hoodwink voters into extending the largest tax increases in state history under the guise of budget "reform." Rather than being honest with Californians, the official ballot summary will omit $16 billion in higher taxes and only mention the spending cap portion of this measure.
Don’t get me wrong-I am supportive of a spending cap, and believe it is good policy to reign in spending. But under the current deal, which includes a two year extension of the tax increases, the price for this cap is too high.
I understand why Sacramento spendthrifts are afraid to reveal the truth to voters-these taxes would affect every Californian in very real ways. Sometimes the truth is painful.
Prop 1A would increase statewide sales taxes from 7.25% to 8.25%, almost a 14% increase. In Los Angeles County, this would raise the sales taxes to a staggering ten cents for every dollar they spend. This is certainly not the proper incentive to jump start consumer spending during an ailing economy.
Income taxes will increase by a quarter of a percent while child tax credits will decrease from $400 dollars to $100 dollars, essentially a $300 per child tax increase. These taxes will hit families the hardest, making it even more difficult to raise a family in California.
Finally, Prop 1A would nearly double the much despised Car Tax, or vehicle license fee. The average family would pay an additional $130, or about a week and a half of groceries. Ironically, the Governor signed a budget raising the Car Tax that he first campaigned to repeal.
The best spending cap would have been Republican legislators refusing to vote for tax increases and using their 2/3 vote to restrain spending. Any meaningful spending limit on the ballot will always get defeated by the special interests or will come at too high a price-like Prop 1A.
The taxes to sustain this spending will take $16 billion out of the economy-which means fewer consumer purchases, less investment, and no job creation. While California government takes more of your money, the hardships of the average citizen will be prolonged as the economic growth and expansion will be stunted by taxes. This is the most consequential tax policy change in decades, and Democrats and their Republican accomplices want to make sure you do not know about it.