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Northern Californians None Too Pleased about State’s April Fool’s Joke

April 2nd, 2015 by Judd Ballard

It’s high times in the Golden State, everything’s looking up, particularly in the Bay Area… San Francisco Giants are reigning World Series Champs, the Golden State Warriors have been the NBA team to beat, recent positive investment news out of FaceBook and Twitter, and the now the highest sales tax in the country? Ouch. Isn’t real estate out there expensive enough? As you continue on, keep in mind, this was overwhelmingly approved by voters.

The sales tax rate in the Bay Area suburbs of Hayward, San Leandro, Union City, Albany and El Cerrito is now 10%! Unfortunately, this hit at the cash register yesterday was no April Fool’s joke. And this may only be the beginning in California. So much for that San Francisco vacation we were planning for 2016…who can afford that?

A double digit sales tax, what is this Europe? Let’s not forget the added complexity for accountants in the ever so complicated states like California, Louisiana, and umm, Ohio.

You always hear different groups lobbying for a national consumption tax. The discussion of a national sales tax is nothing new. Amazon and online retailers act interested on the outside but yawn at these discussions behind closed doors. Ideally, huge spikes in state sales tax rates, the vast un-uniformity of sales tax among the states, and even the growing tax gap resulting from unpaid use tax all help nudge Congress a little closer to taking these issues more serious. Instead, the luxury of taking the game in from the sidelines has been all too comfortable on Capitol Hill.

Consider what this might mean close to home. Would Ohio’s rising sales tax rates ever see double digits? The Governor has pushed and pushed for lower individual income taxes and more sales tax to pay for it. An increase in rates last time around, another proposal for a rate hike this time, and a second attempt at broadening the tax base, but at what point does this start affecting consumer spending, the lower class, and the overall state economy. When that happens, how do you fix it? When was the last time Ohio saw a decrease in the sales tax? Whether most are willing to admit it or not, you don’t have to be an economist or even accountant to consider the possible windfall.

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