Yeah, because applying a 3% tax to an additional 75% of the economic activity in the state (effectively adding 9% to the oberall tax rate, give or take) will be good for the economy.
Not to mention adding 3% to the insane cost of living for people who rent because they can’t afford to own.
And I’m sure businesses will just lay back and enjoy the ride.
That’s just plain nuts.
You say “adding a 3% tax”, but that is not what I proposed. I proposed REDUCING the existing 7% sales tax to 3%. The current sales tax applied to 25% of the purchasing yields the same revenue as a 1.75% sales tax applied to everything (7*.025=1.75%), while a 3% sales tax on 100% of purchasing is obviously 3%. You must be using that “new math” to find 9% in there anywhere.
You need to ask yourself who is freeloading on taxes in CA today. If you report a limited income, you don’t pay any income tax. (There’s a lot of income being under-reported by illegals and waiters, bartenders, spa workers etc. who report only 1/3 of their tip income.) If you then spend your untaxed income on rent, groceries, and services like utilities, cell phone, cable TV, tattoos, tanning, etc. you don’t pay any sales tax. If you rent, you don’t pay any property tax. Very little of your income is being taxed, whether when earned or when spent.
We could argue about some of these taxes being passed along in higher prices so these people actually pay some tax indirectly, but that isn’t the point, is it ? To these people, it APPEARS like government is FREE. Of course they’ll vote for more government “free” stuff.
People with higher reported incomes are getting hit by the entire tax burden. An income tax as high as 10% on top of the 9% corporate income tax that the corporation paid on their investments. A 7% sales tax hits them on every restaurant meal (which dwarfs their grocery spending). High property taxes as homeowners typically takes another 10% of their income. So the majority of their income is already being taxed at high rates both when earned and again when spent.
So exchanging a 7% sales tax which already applies to most of their spending for a 3% sales tax on all their spending is going to be a wash for the higher income groups. It also allows the elimination of the corporate income tax, which is very pro-growth, pro-jobs, and pro-investment.
All of it paid for by those who are currently freeloading. We need to stop driving high earners away by targeting them for taxes while attracting low income freeloaders by leaving them untaxed.
And you are absolutely correct that businesses will LOVE not having any CA corporate income tax anymore, and they’ll LOVE the extra sales from people buying locally rather than shopping online out of state.