California – Taxation without Representation – with more to

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According to CCSCE, in 2005 California was ranked at the 8th largest economy in the world (larger than Spain and Canada) and had a GDP of $1.6 trillion.  http://www.ccsce.com/pdf/Numbers_CA_Rank.pdf

Most property owners in this state pay a standard 1% property tax (not including any add on's from the local district, city or county).  This may not seem like much, but if you purchased your home during the real estate boom/bubble of the mid 2000's, then you are likely paying much more than your neighbors who have lived next door for many years, (or who just bought yesterday), sometimes double or, triple the amount of taxes, for the same or similar home.

A half million dollars may sound like a lot of money, but that was the median price for a home during this boom/bubble period.  As you can see from the chart below, prices have dropped off dramatically, but your tax bill hasn't.  "The median price of an existing, single-family detached home in California during February 2009 was $247,590, a 40.8 percent decrease from the revised $418,260 median for February 2008, C.A.R. "   http://www.svdaily.com/realestateprices.html



http://www.ponderthis.net/wp-content/uploads/2008/08/cahouseprice0708.gif

62% of property tax is used to pay for K-12 public education.    If you don't have children, you can't withhold 62% of your tax bill.  If you do have children attending pubic school and are a renter, then you have no financial burden for the education your children receive.   "The state legislative analyst estimates, based on Pew data, that about 300,000 of the state's 6.3 million public school students are illegal residents. They are educated by California taxpayers to the tune of $7,626 each for a total cost of nearly $2.3 billion."  http://capoliticalnews.com/blog_post/show/2622   So if you have a home assessed at $500k, then your property tax (without local an on's) is approximately $416 per month, $258.33 of which goes straight to public education.

Looking at the latest Budget data from the state, the numbers are staggering.  The California Department of Social Services is one of twelve departments and one board under the umbrella of the California Health and Human Services Agency CHHS.  Just their budget alone shows total expenditures of over $27 billion. Yet the funding only provides for just over $21 billion.  That is a deficient of nearly $6 billion.  Just the administration of the state's food stamp program is nearly $1.2 billion.  That's just the admin costs of that one program, in one department in one state. Talk about Government efficiency! http://www.dss.cahwnet.gov/cdssweb/entres/pdf/2009-10_Appropriations.pdf

As of April 1, 2009, California raised sales tax state wide by 1%, making the minimum 8.25%.  However many districts and cities adopt measures that raise this rate further.  For example, as of July 1, 2009, Los Angeles voted to raise the tax again by an additional ½ percent, which results in further increases to some cities.  Currently, sales tax in LA County is 9.75%, while 5 cities have rates of 10.25 & 10.75%. http://www.boe.ca.gov/publication388  How can people afford over 10% in sales tax on top of all the other taxes?  California has the highest sales tax rate in the country.

California also has the highest gasoline tax in the county.  California charges an 8.25 percent sales tax, on top of the excise taxes on each gallon of gas — 18.4 cents, federal, and 18 cents.   As of 8/15/09, gas in our town is $3.29 per gallon.  It takes 25 gallons to fill up our van.  So, we pay approximately $15.25 just in tax to fill up at the pump.  We usually do that about 3 times per month which equals a tax of $45.75 per month just for gasoline.

Additionally, "new legislation authorizes the Department of Motor Vehicles to increase the Vehicle License Fee (VLF) from 0.65 percent to 1.15 percent when registration fees are due on or after May 19, 2009.  The VLF increase of 0.50 percent is part of the budget plan designed to reduce California's $42 billion deficit.  The new budget includes spending reductions, revenue increases, economic stimulus, and government efficiency.   The increase will be through June 30, 2011, but may be extended to June 30, 2013. The VLF was established by the Legislature in 1935 in lieu of a property tax on vehicles. " http://www.dmv.ca.gov/faq/faq_vlf.htm  Our registration last year was $360. This year it will be $540, or $45 per month in registration fees, otherwise known as a hidden tax.  Our work van has a Kelly blue book value of about $12k. So we would pay half of the entire value of our vehicle in registration fees (hidden taxes) in just 10 years.

There are all kinds of "hidden" taxes that most people don't think about or consider in monthly budgeting, because they are already included in the cost of the product being purchased.  There are also taxes on land line telephones, cell phones and other utilities.  "Pacific Gas and Electric Company (PG&E) announced it has paid more than $151 million in 2008 franchise fees and franchise fee surcharges to the 48 counties and 244 California cities in which it operates."  Of course these fees are being passed on to the consumer in higher raters, which is just another "hidden tax." http://www.pge.com/about/news/mediarelations/newsreleases/q2_2009/090415.shtml

And of course there are other taxes that should not be over looked.  For example, Federal, State & Local Income Tax, Payroll Tax (which is Social Security and MediCare Tax), Gift Tax, Capital Gains Tax, Transfer Tax (aka Death Tax), Generation Skipping Tax, Corporate Tax, Unemployment Tax, Tobacco & Alcohol Tax (aka Sin Tax), Luxury Tax, School Tax, Road Usage Tax (aka Tolls), Hotel Tax, Rental Car Tax, Airline Tax & Recreational Vehicle Tax.  Every time you pay a "fee" to a government agency, for anything including any kind of a "permit," it is a "hidden tax."  Now they are proposing Carbon Tax, ObamaCare Tax and higher taxes and fees of every kind.

This is just the tip of the iceberg of the problems facing California and the US.  The state withholds taxes from your paycheck.  If you have overpaid, then you get a refund.  The California State Controller, John Chiang, began issuing IOU's for ALL tax refunds as of July 2, 2009.  I wonder what would happen if I wrote an IOU for my upcoming property tax bill?  Try it and see...