L.A. sales tax would jump to 10.25% under Arnold plan

Gov. Arnold Schwarzenegger is expected to unveil a plan today for a steep sales tax increase and deep cuts in services to wipe out a budget shortfall that is expected to swell to more than $24 billion by the middle of 2010, according to Capitol staffers with knowledge of the proposal.

The linchpin of the governor's plan is the sales tax increase of 1 1/2 cents on the dollar, which could raise more than $10 billion through fiscal 2009-10. Such a tax is likely to face resistance from Republicans, who blocked a smaller increase proposed by the governor last summer and have vowed to continue to do so.

Sales tax in Los Angeles would shoot up to 10.25% if the governor's newest plan were to be approved. That would include a half-cent sales tax hike that Los Angeles voters apparently passed on Tuesday to fund transit projects. The statewide sales tax rate is 7.25%.

The governor's proposal also includes cuts of several billion dollars to schools, healthcare programs and law enforcement.

Read more on the story here.

-- Evan Halper

Photo: Los Angeles Times

Comments

[skitzo]

I think the roids have ruined his brain.

10.25% - $10.25 for every $100 you spend. I will be buying everything off the internet.

10.25% Sales Tax
9-11% State Tax
28-35% Federal Tax

Effective Tax Rates over 50%.

[Mark]

Welcome to the wonderful world of higher taxes - for people of ALL income levels. Wait until we see what Uncle Sam has in mind for us. We need to get our "entitlement" and pension promises under control, or this world will become those covered by entitlement programs and pensions vs. those not.

[Clark]

If you are under the age of 13 don't start reading the lies of the government through the corrupt press in America. Our country is under economic attack and the perpa-traitors hide behind your politicians. The US is the real evil empire. American people are the victims of these giant blood sucking ticks.

[Kathleen]

So, good old Arnie wants to take MORE away from our schools! What happened to all the money from the lottery? Can ANYONE answer this? Mr. Governor, how about you fork out a couple million that you've made off us and help out this state that you supposedly love so much? Why would he care where the money comes from when each and every one of us is struggling to keep our heads above water. Why would he care about our public schools when his children go to private schools and his family has private health care.
We, the people of the state of California, did not cause this deficit, however we are expected to clean up you and your predecessors mess. Hmmm....I think you need to be TERMINATED!

[Patrick]

Get ready to see this happening in other states as well. Sales tax has always been a key source of revenue for state and local governments but in this difficult economic time they are going to rely upon it even more. Especially considering that sales taxes were first enacted following the Depression as a taxing scheme to replace the revenue losses of declining property taxes. Our Tax Team at Sabrix is monitoring California and every other state in the union to see who follows...