I recently led a legislative fact finding mission to Nevada where we heard from businesses that fled California’s burdensome taxes and regulations for a more welcoming environment across the state line. We now face 11.2% unemployment in our state, the highest on record, with only three other states worse off. In the midst of this crisis, on May 19th Californians will vote on Proposition 1A, a $16 billion tax increase that will cost the average family an additional $1100 per year.
Undoubtedly, Prop. 1A is a step in the wrong direction. The measure raises income tax, sales tax, almost doubles the hated car tax and costs families with children another $200 per year by eliminating the child tax credit.
Proposition 1A would make California the highest tax state in the nation. The measure extends recent tax increases for up to two more years, extending with it the pain on hard working Californians. When I was in Nevada, one business owner said to me, “Doing business in California is like death by a thousand cuts.” We cannot continue to punish those we need to help us out of this economic crisis.
Because of bad policies causing businesses and productive citizens to flee our state, and because of the economic downturn all Americans are experiencing, unemployment now tops 20% in some parts of the state. Families are finding that they need to tighten their belts. Sacramento needs to do the same. Instead, Proposition 1A would hit the poor the hardest by raising the regressive sales tax and car tax.
In 2006, before the recent tax increase, Kiplinger’s magazine published a comparison of state car taxes and fees. The comparison factored in the sales tax you pay when you first buy your car as well as the registration fees you pay yearly. Kiplinger’s reported that purchasing a Toyota Camry would result in $2,212 in taxes and fees over five years, the 48th highest in the country. Prop. 1A would extend the 1% sales tax increase and the near doubling of the car tax – a tax so hated that Gray Davis’ car tax increase drove the 2003 Recall.
Proposition 1A proponents are doing their best to avoid mention of the $16 billion tax increase. The deception is so great that the opposition Howard Jarvis Taxpayers Association has taken to mocking the Prop. 1A campaign with a “Where’s Taxo?” feature on its campaign website modeled on the children’s book, “Where’s Waldo?” Visitors are invited to search for a mention of the $16 billion tax increase in proponent’s communications, but so far nobody has found it.
Instead of talking about taxes, Proposition 1A proponents promise voters a “spending cap,” and even protection from tax increases. However the Legislative Analyst states: “Proposition 1A does not strictly limit the amount of revenues that could be collected by the state or the amount of spending that could occur.”
In the last ten years out-migration from California has totaled 1.4 million with many of those people going to Arizona, Nevada and Texas where taxes are far lower. I’d like to encourage you to vote no on Prop. 1A when you go to vote on May 19th. Then, let’s have a conversation about getting our economy back on track by making our state a place where citizens can prosper.