Regressive sales taxes (like upcoming transit tax) hurt the less fortunate the most
In the frenzy to bail out boondoggle fantasies like a BART-to-San Jose line, bureaucrats’ appeals to the most vulnerable fall flat when you understand just how harmful their proposed half-cent sales tax will be to the region’s lowest income earners. Stacked on top of Measure A’s countywide 5/8-cent hike, struggling San Joseans could soon be paying a 10.5% sales tax.
Regressive realities
An income tax rises with what you earn. A sales tax does the opposite: it [taxes] what you spend, and lower-income households have to spend nearly every dollar they bring in.
Stealing from the poor…
“With a high poverty rate in what should be a wealthy county, why a sales tax? This seems to be the worst possible way to raise money for services for people who are in financial need.”
~Susan Shelley, HJTA
Trains for the rich
“Longer distance transit is highly utilized by the top quintile, the top 20%. Caltrain, BART, and ferry service are used by upper income people disproportionately. The cuts affect everybody, but oddly enough, it’s the highest income individuals that are most impacted.”
~Tom Rubin
Hurtling past the 10% threshold
This November, voters in Alameda, Contra Costa, San Francisco, San Mateo, and Santa Clara counties will be asked to raise the sales tax to bail out Bay Area transit. The increase is half a cent (0.5%) in the four other counties and a full cent (1%) in San Francisco.
SB 63 would push the cumulative sales tax rate to 10.5% in San Jose,10.25% in Richmond, 10.75% in Fremont and Berkeley, and to 11.25% in Oakland and Hayward.
Opportunity Now’s Will Sherman is the editor of Tax-Free Tuesday.
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