California About To Kill Business As We Know Them With Taxes!
November 21, 2008
From the governor who promised he wasn’t going to raise taxes once he got into office, coming soon to a blue state near you… The only way to balance the California budget and pay for all those great social programs is to… raise taxes! Surprised? Not us. Problem is, the taxes the Governator, Arnold, [clueless] is proposing will KILL businesses and real estate as a result.
We got this report from California Association of Realtors today:
Due to the recent dramatic declines in the California, national and international economies, revenues to the state are projected to erode substantially. The shortfall is estimated to run from $22.5 billion to $27.8 billion. [Ever notice how government never tries to do with less???? - FedUpEditor]
As a result of the projected budget gap, Gov. Schwarzenegger called the Legislature into special session on Nov. 5. A special session may only address the subject of the session as defined by the governor, and any resulting legislation will take effect 90 days after the close of the session. As many members of the current legislative body are “lame ducks” whose terms will expire at the end of November, it may be more difficult for the governor to reach agreement with legislators who will be out of office by the end of next week. [So because legislators have term limits and are not in fear of losing their positions because they have to leave anyway, they don't care about how their laws will affect the constituents? - FedUpEditor]
The governor has proposed a number of tax increases that he wants the Legislature to consider during the special session in order to close the projected budget gap. The governor has proposed tax increases including: increasing the sales tax by 1.5 percent, from 5 percent to 6.5 percent, for three years beginning Jan. 1; expanding the application of the state’s sales tax to include taxing appliance, furniture and vehicle repair, golf, and veterinarian services; and extending the sales tax to amusement parks and sporting events beginning March 1. [So now people who have had a hard time going to sporting events because they can't afford all the incidentals, have to pay tax in addition to the inflated ticket prices. - FedUpEditor] He also has proposed imposing a 9.9 percent oil severance tax for the right to extract oil in California effective Jan. 1; [This will force oil companies to move operations out of state to places like Alaska that are more friendly to the oil industry. Along with it will go jobs and revenue. Good idea, Gov! - FedUpEditor] increasing alcoholic beverage taxes by the equivalent of five-cents a drink as of Jan. 1; and increasing the Vehicle License Fee (VLF) by $12 beginning Feb. 1. [Not much we can do about this. People have been absorbing fees like this for years. We have to drive in California. - FedUpEditor]
In addition to the governor’s proposed tax increases, the state’s Legislative Analysts Office (LAO) has proposed several tax expenditures that can be modified, including taxing all like-kind exchanges (i.e., 1031 exchanges) [Now out of state investors will no longer find it attractive to exchange into California properties and further hurt a staggering economy. - FedUpEditor] and repealing the exclusion that currently enables taxpayers to defer paying income taxes until the property is ultimately sold; and reducing the dependent credit to bring it in line with the personal exemption, currently $99 per person.
While the governor’s proposals for tax increases do not include real estate services at this time, the LAO is advocating that the governor’s Commission on the 21st Century Economy consider taxing all final transactions — whether they be tangible goods or services.
C.A.R. has long-standing policy opposing extending the sales tax to services, as well as supporting the retention of 1031 exchanges. Also, while not proposed by either the governor or the LAO, some interested parties have suggested that, given the magnitude of the budget gap, the issue of a split roll — a higher effective property tax rate — for commercial property be revisited. C.A.R. has thus far successfully opposed any attempts to implement a split roll property tax system.
Bottom line is this; our country is moving this direction, and people don’t seem to care. With the promise of higher taxes, they’ve voted for a guy who’s promised to raise taxes on the people who provide jobs and give money to those who don’t. Until the system crumbles I guess the public will continue to vote for the same idiots who are bringing down the house of cards. Our economy is in real trouble. And more taxes will not help the situation. But raising taxes seems to be on everyone’s agenda. And bloated budgets don’t seem to be getting trimmed any time soon. So what is happening in California will be coming soon to a state near you. Enjoy.
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Democrats complain that the wage hasn’t been increased in nine years and that taxes should be increased, not cut. Money