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Sales tax hike considered to fix deficit

August 5, 2008 12:00:00 AM PDT
Buying any retail item in California means paying a 7.25 percent state sales tax. In most counties, local taxes make it more than 8 percent. Now, the governor is floating the idea of raising the state sales tax 1 cent on the dollar after repeatedly saying he would not raise taxes while in office. "We cannot tax our way out of this problem. More taxes will destroy what we're trying to save, which is jobs and revenue," Gov. Arnold Schwarzenegger said.

The state is $15.2 billion in the red. State sources familiar with the government talks said that the increase would be temporary, but many voters are not buying it.

"Nothing is temporary in Sacramento. I think these types of increases are there to stay," Mark Umutyan said.

Schwarzenegger has already ordered thousands of layoffs and has ordered pay cuts to state employees to the federal minimum wage, sparking protests. Many Californians are already struggling with higher food and gas prices. A sales tax hike could add insult to injury.

"I voted for [Schwarzenegger], and I'm going to say, 'Not a good idea right now.' Think of another plan to help California at this time but raising the sales tax -- I don't think that's a great idea at all," Julie House said.

L.A. County residents could decide the fate of a separate sales-tax increase. The County Board of Supervisors votes today on a ballot measure that, if passed by voters in November, would fund transportation projects.

"I think the MTA is pushing it. I think they're not doing enough with the budget they have already, and I don't think they should be given more money. But I think [Schwarzenegger] is doing alright and if he needs 1 cent on every dollar, that's fine," Richard Goff said.

If both tax increases went into effect, residents would be paying 9.75 percent sales tax in L.A. County. The state sales tax would bring in an extra $5 billion per year.

 

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