From Assemblywoman Melissa Melendez:
Another year, another tax day approaches. April 15th can be a depressing day, but especially for Californians.
Here in California we have some of the highest tax rates in the nation, we downright love to pay our taxes here. At least that’s what it would look like from the outside looking in. Year after year the state legislature passes fee increase after fee increase, taxing every single part of our lives, from the cradle to the grave. Californian’s high rate of taxation doesn’t stop at the state level either; there are still city and county taxes to factor in as well.
On April 15th, the day synonymous with paying taxes, I will have my bill AB 718 heard before the Revenue and Taxation Committee proposing a Sales Tax Holiday. I don’t have a single doubt that the bill will be killed in Committee by Assembly Democrats, never even reaching the Assembly Floor.
The month of April has historically been one of the slowest retail sales months of the year. With a consumer based economy and high unemployment, it’s important to encourage consumer spending to grow our economy and create more jobs.
Currently, consumers in California have several sales taxes imposed upon them, including state, county and city. The state sales tax constitutes 6.5% of the taxes that retailers must collect from consumers.
AB 718 will relieve consumers of the 6.5% state sales tax for a 24 hour period starting on April 15th, 2014 and every year thereafter. This will reduce prices, promote consumer spending and stimulate the economy. Rather than focusing on economic stimulus through the means of large government spending from the top down, AB 718 will concentrate stimulus efforts from the bottom up, directly through consumers.
The fact of the matter is that a sales tax holiday introduced in any state means there are extreme deficiencies within the state’s tax code. In California, the deficiencies are abundant. This bill in many ways is designed to shine a bright light on that fact. If you’re a resident in California with an ounce of common sense, you know our tax code is a monstrous behemoth that has been spiraling out of control for longer than we can remember. Combine our tax code with some of the highest tax rates in the country and we have an exodus of businesses and people leaving the state that has never been seen before.
Our former Governor and President of the United States, Ronald Reagan, once said: “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
That quote is 25 years old and the problem with taxes has only become more exasperating as time has passed. Just imagine how bad the taxes and tax code could be for this state in another 25 years if we don’t work to find solutions to simplify and ease the burden on taxpayers. Seriously, go ahead and take a moment to imagine our state in 25 years with exponential business migration and the human capital it takes with it. It’s more than a bit sobering, it’s frightful.
We need to look to other states and see what examples we can learn from. Most recently, Governor Bobby Jindal of Louisiana introduced a plan to eliminate personal income tax and corporate income and franchise tax. Governor Jindal’s plan will expand the sales tax base to services that are taxed in other states as well as eliminating over 200 current tax loop-holes. His plan shows that eliminating the number of exemptions in the tax code will protect low income consumers as well as preserve and foster a competitive business climate.
For many politicians in California, ‘preserve and foster’ sound like words from a dead language when it comes to our state’s economy.
On April 15th make sure to check on the status of AB 718 when it is heard before the Assembly Revenue and Taxation Committee. We will find out if Sacramento Democrats are ready to take the first small step to lift the burdens placed on consumers and taxpayers throughout California.