The California Tax Reform Association projects that ten different tax increases will generate over $20 billion for the floundering state. Tax hikes on business property, oil, tobacco, alcohol, vehicle licenses, businesses, top income brackets and more will allegedly solve the budget crisis without negatively impacting the state’s fragile economy.
Joel Fox, Editor of Fox & Hounds Daily, rightly expresses a healthy dose of skepticism. According to Fox, the proposed tax hikes would create higher unemployment, punish the consumer, and scare individuals and businesses out of the state. His predictions are highly probable, especially considering that a barrage of tax hikes failed to plug the budget deficit, create new jobs, or stimulate a robust recovery.
Instead of proposing a plethora of new taxes, perhaps the California Tax Reform Association should have outlined ten, specific measures to cut excess borrowing and spending. This is the root cause of California’s financial distress, and until someone is willing to face the underlying problem head on, the golden state can expect more deficits, high unemployment, and anemic growth.