Document:California Press Release 31 October 2000 Sales Tax Cut Phony Tax Relief

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14547 Titus Street, Suite 214
Panorama City, CA 91402
For immediate release: October 31, 2000
For additional information:
Juan Ros, Executive Director
Phone: (818) 782-8400

What will you do with your $31? California Libertarians call sales tax cut 'phony' tax relief

PANORAMA CITY -- Halloween pop quiz: what can California families buy with the extra money in their wallets following last week's announcement by Governor Gray Davis that record revenues would trigger a quarter-cent drop in the state sales tax next year?

(A) Go to Disneyland; (B) Spend an evening at the movies; (C) Buy a Razor Scooter for the kids; (D) None of the above? If you answered (D), you'd be right -- and California Libertarians think this tax cut is far from a treat.

"Gee, thanks Governor Davis, for returning so much of our money back to the taxpayers next year," stated Libertarian state chairman Mark Hinkle. "You're so generous with our money we don't know what to say."

The sales tax cut was triggered by a 1991 law signed by former Governor Pete Wilson which automatically reduces the sales tax rate when state reserves exceed 4% of the general fund for two consecutive years.

But the average taxpayer will save only $31 next year -- not enough to pay for even one adult 1-Day pass to Disneyland ($41), an evening at the movies for a family of four (about $32 for two adults, two kids, plus popcorn and soda), or a Razor Scooter (retail price $99).

"This is phony tax relief," said Hinkle. "While Libertarians support anything that decreases revenue to Sacramento, we would have gone much further."

For example, Libertarians support:

  • Returning this year's entire $12 billion budget surplus to taxpayers. "With roughly 13 million taxpayers, that amounts to $923 per taxpayer -- nearly 30 times the relief of the quarter-cent sales tax cut," Hinkle pointed out.
  • Eliminating the state car tax and gas tax immediately. The car tax is being partially phased out, but 100% elimination would save taxpayers an additional $56 per vehicle per year, permanently. Eliminating the state gas excise tax would save minivan owners about $122 per year, assuming biweekly fill-ups, Libertarians estimate.
  • Slashing personal income tax rates. California ranks 9th in the country in per capita state tax burden according to the Tax Foundation, with marginal rates from 1% to 9.3%. "We want California to rank 50th in this comparison," Hinkle added.

"In the end," concluded Hinkle, "Governor Davis's announcement is nothing more than a cheap trick to play on overtaxed Californians."