Friday, November 07, 2008

If You Tax Something, You Get Less Of It

From the LA Times article "A State Sales Tax Jump Could Backfire":

California has a reputation as a high-tax state. When it comes to sales taxes, at least, it's well deserved. At 7.25%, the Golden State's statewide sales tax rate is the highest in the nation, according to a 2007 ranking. If Gov. Arnold Schwarzenegger's proposed three-year, 1.5% increase (to 8.75%) goes into effect, it would solidify our lead over our closest competition -- Mississippi, New Jersey, Rhode Island and Tennessee, which all had 7% statewide rates according to the most recent ranking by the Tax Foundation.

And that could take sales away from retailers as consumers look to neighboring states and the Internet to avoid paying taxes.

"The higher the sales tax is, the more likely people are to buy things out of state or online," said Lynn Freer, president of Spidell Publishing in Anaheim, which produces information for tax professionals. The effect could be especially noticeable in Los Angeles, where a higher state rate -- combined with the recently passed Measure R and other local levies -- would eventually push the sales tax paid within the city to 10.25%. That would be one of the highest levies of any U.S. municipality.

10 Comments:

At 11/07/2008 11:23 AM, Anonymous Anonymous said...

California is what you get when democrats control everything.

 
At 11/07/2008 12:19 PM, Blogger The Daily Pander said...

The highest sales tax in the country is in Chicago: 10.25% (I know, I live there). It was pushed into law at the urging, in fact at the insistence, of County Board President Todd Stroger, a Chicago machine politician of the first order. His candidacy was endorsed, over that of Forrest Claypool (an imperfect but legitimate reformer), buy then U.S. Senator and now President-Elect Barack Obama. Interpret that as you will.

 
At 11/07/2008 1:25 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

"The highest sales tax in the country is in Chicago: 10.25% (I know, I live there)."

Only until 1 January, if the CA governor and legislature have their way. The STATEWIDE CA tax will rise to 9.25%, and with local sales taxes tacked on, will be as high as 10.5% in CA. LA will be 10.25%. Hope your misery loves company.

Oh BTW, this tax increase also includes levying taxes on a list of SERVICES. So we will further distance ourselves from you also-ran high tax jurisdictions.

 
At 11/07/2008 4:58 PM, Anonymous Anonymous said...

City of Chicago sales tax is 11%..


God Bless our Democrats...

 
At 11/07/2008 5:36 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

California politicians do NOT like being number 2. We will prevail!

 
At 11/07/2008 9:00 PM, Anonymous feeblemind said...

Funny, my economic learning at Backwater U. was that you don't raise taxes in an economic downturn and suck money out of the economy. That just makes matters worse.

 
At 11/08/2008 3:03 AM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

Silly feeblemind.

The taxpayers SPEND their money, while the government INVESTS their money. Ask any politician.

 
At 11/08/2008 3:14 AM, Blogger 1 said...

Interesting about Chicago/Cook county but hardly a suprise with people like the Daly-Stroger duet in action...

California apparently isn't the only state ready to extort more money out of their citizens...

The following is from the Tax Foundation: Voters Will Consider Tax-Related Ballot Initiatives in 23 States

 
At 11/08/2008 10:01 AM, Blogger save_the_rustbelt said...

California has Silicon Valley.

Michigan has Detroit.

Be very careful about drawing cause and effect relationships.

"Economics by cliche" just buried the GOP. Be very careful.

 
At 11/12/2008 9:24 PM, Anonymous Anonymous said...

Cook County Illinois has 10% sales tax.

Yes, that is Obama's home county.

 

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