California financial nightmare
-->Credit Crunch, Credit, Politics, California Housing Crash, The Economy, Real Estate February 11th, 2009
It looks like California will raise gas, income, and sales taxes in order to deal with the state budget deficit. Instead of cutting spending, the geniuses in Sacramento now want to increase your taxes during a recession. Brilliant, don’t you think?
According to the LA Times:
The plan Democratic leaders laid out in confidential meetings with rank-and-file lawmakers would temporarily increase sales taxes by one cent, bringing the overall sales tax rate in Los Angeles County to 9.75%, according to legislators who were present. Motorists would pay 12 cents a gallon more for gasoline.
Vehicle license fees would nearly double, jumping from the current rate of 0.65% to 1.15% of the value of a car or truck. Such a hike would represent a major turnabout for Schwarzenegger: He rode a tide of anger against steep vehicle license fees to the governor’s office in 2003, and his first official act in Sacramento was to slash those fees.
The plan also includes a temporary personal income tax surcharge. The surcharge would be a quarter-percent of taxes owed.
If you think that things are bad in California, wait until this law passes. California will keep losing population to other states that don’t overtax their residents.
But wait, there is more…The pain is barely starting for California. Interesting article on The Wall Street Journal:
BIG SUR, Calif. — As Sacramento squabbles over the state’s $42 billion deficit, Californians are getting a bitter taste of what’s to come after the steep budget cuts that are inevitable when legislators and Gov. Arnold Schwarzenegger finally hammer out a deal.
Some world-famous parks like Pfeiffer Big Sur State Park may not open this year. After-school programs in low-income areas are being scuttled, putting high-risk teens on the street just as police forces are being cut. Schools are closing classrooms, and some highway projects have ground to a halt. The state may not be able to monitor some sex offenders as required under law.
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