Taxation is one of those fault lines that form our political boundaries. Conservatives tend to be against tax increases and liberals tend to be for them. In this era of mounting deficits, Republicans believe that the situation can be helped by reducing burdens on businesses, while Democrats salivate over the businesses' deep pockets. In the state recent budget battle, Republicans fought against increases the Democrats wanted.
It's a battle that's waged repeatedly, at all levels of government, in all parts of the country. Just because it's an ongoing debate doesn't mean it's a complicated issue, however. One only needs to read this article from the Star that discusses the sales tax decrease that took effect on Friday.
"By them lowering tax rates, it'll help increase sales, absolutely," said the owner of Rocket Fizz in Camarillo.
The owner of the Bunnin Automotive Group in Oxnard told the Star the same thing.
At the Bunnin Automotive Group in Oxnard, owner Leo Bunnin thinks the cut in sales tax will be a big win for auto dealers. A 1 percent reduction adds up on big-ticket items such as vehicles, he said.
I'm a little slow so help me figure this out. If lowering taxes increases sales, won't raising taxes decrease sales? And if sales are decreased..doesn't that mean tax revenues will decrease?
So why do Democrats keep pushing for higher taxes to raise revenues, like this:
Gov. Jerry Brown tried but failed to convince legislators to maintain the higher 8.25 percent rate to help close a budget gap that stood at $26 billion early this year before severe cuts were made.
I don't quite have an answer. Tax increases certainly look good on paper. Papering over the budget gap is a time-honored tradition in Sacramento because it's all that's been required to pass a budget to clear the way for more borrowing. So tax increases might be promoted for practical reasons even though the Democrats in charge know they don't work.
I suppose they could really believe it will increase tax receipts. I hope they read the Star's article and find out what happens in the real world.