On April 1st California will have another 1% added to the state sales tax. This additional tax comes at a very bad time as small businesses are struggling to survive the economic uncertainty. The last thing we need is to have higher prices that don’t result in higher profits. California is taking money out of an economy that is already having a hard time. This will not only impact consumers but also businesses and non-profits that now have to pay more to buy supplies, computers, software, equipment, etc.
Many small business owners that I’ve talked with have said that they don’t believe that this tax will be temporary. Sacramento has a spending problem and once they have implemented a higher tax rate it is very unlikely that it will be allowed to expire in the future. Luckily we have an option to defeat 1A and force them to come up with some other way of keeping these taxes in effect for a longer period of time.
This higher tax puts California small businesses at a competititve disadvantage as many other states have lower (or even non-existant) sales tax rates. This may increase the incentive for some small businesses to move to other states further decreasing the economic activity in California.
There will be a lot of damage as a result of this latest tax increase. “Thank You” California for the anti-bailout. Kick us when we’re down. Tax us more when we have less to give.
