California has already gained a reputation for being one of the most expensive states to reside in, with the consistent struggle of its residents to make ends meet. Yet, the reputation and repeated struggle has not yet served as a deterrent for the California government to stop raising taxes.
Recently, the California government has once again proposed imposing sales taxes on services. Certain legislators have justified the economic policy by explicating how the policy would mitigate the fluctuating California budget and would generate more support to California families. Once again, Democrats have failed to acknowledge that the funding for the taxes would stem from California families and small businesses.
Moreover, a research group, the California Tax & Budget Research Project (CTBRP), has formed to further illustrate the detrimental effects of the tax raise. Supplementing their research with other studies, CTBRP concluded that the tax increase will have no association with the mitigation of the fluctuating budget. Moreover, the raise will force taxpayers and small businesses to pay billions of dollars in higher costs across necessary industries, such as housing or banking.
In addition, small businesses would suffer greatly. The higher costs from the tax raise will result in higher production costs of their goods. The higher production costs, in turn, will result in higher prices to the consumers, which will eventually put them at a disadvantage in terms of competition with other businesses.
In the end, the proposed tax raise would force small businesses out of the market due to higher production costs outweighing the revenue generated. The increase in sales tax on services would be significantly damaging to California residents. Furthermore, residents are simply tired of the government confiscating their hard-earned money only to put it to useless initiatives.
California’s budget does need improvement, but a tax increase that only produces further suffering of middle-class families is not the solution California needs.