Taxes have been around for decades to provide money for schools, roads, hospitals and public causes that help the city become what it is today. Raising state taxes by 1 percent for a grand total of 9.3 percent has been an ongoing discussion for some time now. As of May 19, the state of California will find out if our tax will stay with the tremendous amount of 9.3 percent.
In order to get the economy to a healthy level, citizens need to spend money in order for the state to have money. With an increase in sales tax, it may help a bit, but it will not completely resolve the state problem. The people who still buy necessities regardless of the downturn, do not have too much of an issue with the increase. However, the citizens who had to cut back in order to survive are going to have difficulties.
Although 1 percent does not seem like much compared to something like 5 percent, it does make the price of nonfood items in a grocery store several cents higher. For a family with laid-off workers or people on welfare, it makes a big enough difference.
The increase is supposed to help with the current budget crisis, according to Gov. Arnold Schwarzenegger. It would last three to four years and after that, the tax rate would gradually drop. It would ultimately settle at a lower cost than the current state rate of 8.3 percent.
Along with the tax, there would be an increase in the vehicle-license fee from 0.65 percent to 1.15 percent, a $15 billion reduction in government spending and $8.6 billion reduction from education. No one who drives wants to see an increase in anything having to do with their car. Insurance, gas and registration already cost enough.
There is the possibility of people going bankrupt because the tax increase could push them over the ledge. If anything, that would contribute to our horrible economy.
An increase in tax also means an additional price for purchasing cigarettes and alcohol. The increase is supposed to encourage people to stop smoking and drinking. If that were the case, and people stopped purchasing cigarettes and alcohol, that would completely put several companies out of business. With companies out of business in California, that also would not help better our economy.
Unless the government wants to dig deeper into the hole we already are in, they should not raise taxes. Money being the problem, taxes are not the solution. It would cause a domino effect among citizens and contribute to the possibility of bankruptcy. The government represents the state of California and a tax raise will prolong a horrible crisis for years on end.
