☆ Joffe: increasing the sales tax rate is unnecessary
Which way will voters go, when it comes to backbreaking sales tax hikes on this year’s ballot? Wrapping up our election series, Opportunity Now takes a look at CoCo Tax President Marc Joffe’s warning on X that sales tax rates in several Alameda County cities could soon climb to 11.25%. But they don’t need to: Fixed rate sales, and even property taxes, generate increasing revenue that consistently beats inflation. Raising the rate is unnecessary, he argues, when government can (or at least should) run much more efficiently.
California ballots were full of sales tax increases in June, and we will be seeing more in November. The result is rates in many areas approaching the nation's highest: currently topping out at 11.75% in Lancaster and Palmdale (in Los Angeles County). A transit sales tax on the November ballot would push rates in several Alameda County cities to 11.25%.
Voters may have the misimpression that sales tax revenues sit frozen when the rate stays unchanged. But sales taxes are percentages of purchases measured in current dollars, so when prices rise, population grows and economic activity expands, collections rise automatically.
California's General Fund sales tax rate has been 3.9375% since July 1, 2011. Over that period, General Fund sales and use tax collections rose from roughly $19.24 billion in fiscal year 2011-12 to $35.01 billion in 2024-25, an increase of nearly 82%, or 4.7% compounded annually, with no change in the applicable rate
So, governments do not need rate increases merely to keep pace with inflation and population.
Their existing revenue envelope is already expanding. The responsible answer is to set priorities, control compensation and operating costs, eliminate lower value programs, and learn to live within the growing revenues taxpayers already provide.
Excerpted from Marc Joffe’s article on X. Read the whole thing here…
Follow Opportunity Now on Twitter @svopportunity
We prize letters from our thoughtful readers. Typed on a Smith Corona. Written in longhand on fine stationery. Scribbled on a napkin. Hey, even composed on email. Feel free to send your comments to us at opportunitynowsv@gmail.com or (snail mail) 1590 Calaveras Ave., SJ, CA 95126. Remember to be thoughtful and polite. We will post letters on an irregular basis on the main Opp Now site.