While the legislature is in session, the National Federation of Independent Business/California will be profiling anti-small business bills and initiatives and the adverse effect they would have on California’s job creators. This is the second column of the 2013 series.
It’s no secret that gas is expensive in California. For those of us who drive on a regular basis for work or family commitments, we feel it in our wallets every time we fill up at the pump. And the unfortunate news is that there are proposals in the Legislature right now that would make that cost go up even more.
Senate Bill 241 by Senator Noreen Evans would implement a new 9.9% per barrel tax on oil drilled in California. The money is supposed to fund higher education and parks. Anyone see the nexus here? Small business owners sure don’t. The author claims that since other states charge this tax, we should as well. In this case, “monkey see, monkey do” isn’t the right answer.
What many people don’t know is that California already charges a property tax on oil that is in the ground – other states don’t. Additionally, all of the oil drilled in California is used in-state, which means an increase at the pump – and we already have the highest gasoline taxes, as well as the highest sales and income taxes, in the U.S.
Small businesses that provide delivery services or use a fleet of vehicles would be immediately impacted. In fact, many are already struggling with the current cost of gas and have been forced to charge their customers with a fuel surcharge in order to handle the increased expense of fuel. Landscapers, pizzerias that deliver and other small business owners will have to consider raising prices to cover the increases or forgo raises for their employees. Neither is ideal and both can mean the end of a struggling small business.
Instead of finding unique ways to tax California small entrepreneurs out of business, why not find ways to reduce the cost of things that affect their bottom line? Adding yet another burdensome tax just isn’t the right answer and another classic example of little our Capitol denizens understand what it truly means to run a business.