Mar 28 2009
Sales tax hike to go into effect on Wednesday, April 1
Spend now, or pay 1% more after Wednesday.
Wednesday is the fateful day, April 1, when the sales tax in California goes up by 1%. In the Bay Area, where sales tax is already higher than most other places in the state, that means sales tax will be over 9%. In most places it will raise the sales tax to 8%, or there abouts, from the 7% we are all familiar with now.
But if you shop now, and spend your money now, then you won’t be affected by the tax.
It may seem like not a big deal. However, a family of four (on average) spends $500.00 month on taxable groceries. That means they were paying $35.00 in sales tax. Now that will be $40.00. Over the course of 12 months, that $5 increase will cost $60.00. This can be a significant amount for people who are on a tight budget.
If you are buying big ticket items - televisions, computers and cars, this increate will be even more apparent.
If the California government was looking for a way to stifle spending, they found it. Whenever people see prices go up, and income remain steady or drop, then sales go down.
A better plan would’ve been to extend a small sales tax to services. Instead of raising sales tax by 1%, they should’ve put a 1% sales tax on services. That would’ve brought in more money, and not placed increases on such items as food, clothing, school supplies and shoes.
