Fighting taxes…

I’ve been stewing over the latest property and sales tax hikes. I don’t understand why Arnold Schwarzenegger thought raising taxes substantially – in this economy – was a good idea.

But then again…

This is the same guy whose ‘sound judgment’ created the likes of Junior and Jingle All the Way.

And now, he wants to prolong it for several years through a special statewide ballot?

When I make less, I have to spend less. I can’t demand more money. Why can my state live financially irresponsible in a way that I can’t?

I didn’t give my approval on May 19th. I have to figure out how to survive on my new tiny salary; can’t I demand the same for my taxes?

Is this just a California thing or are you spending a couple extra Benjamin Franklin’s a month on taxes?

Posted by Beks on May 21, 2009 at 5:00 AM in General Personal Finance, Home Ownership, Life Experiences, Living Frugal, Monthly Spending | 21 Comments »
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Juliana responded:
Posted: May 21st, 2009 at 8:31 am
First of all, I want to tell you that I enjoy reading this blog. I do not have debt right now, but am working on improving our personal finances. Your story is inspirational. Thank you.

I also live in California, and just got my car registration on our 1995 vehicle. It is usually $67 but the bill was for $98. I think this is temporary (since 1A was defeated), but besides the sales tax, this is the first time it has been so directly apparent to me.

I don’t look too closely at what is taken out of my paycheck – it gets depressing. My hours vary, too, so it isn’t as noticeable.
Eddie responded:
Posted: May 21st, 2009 at 9:30 am
Don’t get me started: I’m in Massachusetts where our uber-liberal Senate just voted to raise the sales tax….increaded state payroll (again, but what else is new), and the promised reforms are like vapor from my mom’s old Vaporizer.

Time for another revolt across the land, me thinks.
Eddie responded:
Posted: May 21st, 2009 at 9:31 am
…and I can’t spell worth beans today!

increaded = increased
Lynn responded:
Posted: May 21st, 2009 at 9:50 am
Oh coming from NJ I can sympathize. I will be one of those voters voting out our current Governor come November. I didn’t think my taxes could go any higher but boy was I wrong. Our sales tax is still only 7% but other taxes are ridiculous.
Joy Smith responded:
Posted: May 21st, 2009 at 10:04 am
Nope. It’s not just Arnold’s fault. We live in Kansas and the taxes here keeping getting higher and higher and higher. One of the biggest reasons I think was because of the major flood we had several years back. Right after that was when everything skyrocketed. And it isn’t just the taxes either. Our cost of living has gone up here. Where we could once get a 3 bedroom house for around $400 now costs well over $1000, yet our paychecks haven’t gone up!!!
Mrs. Modern Tightwad responded:
Posted: May 21st, 2009 at 10:56 am
It is unfortunately the same here in Vegas. Here the current plan is to increase the sales tax, double the annual state business license fee, changing it from a business fee to a storefront fee (could be a real problem with multiple locations), double payroll tax, and raise motor vehicle registration fees.

The problem I see for governments is once your population reaches a certain point it does limit what you can cut. For example, in some places I believe there’s a mandatory minimum response time for firefighters and paramedics which means there has to be a station no more than x miles from the last one. Gone are the days of volunteer groups that handled a lot of township or rural affairs.

The other problem is in economies such as ours the demand for services actually increases as people lose jobs, homes, and medical care. While our federal government can print money and throw it at whatever they want, states have to balance their budget, which means cut spending or increase taxes, usually a combination of both. Technically they are doing what an individual has to: cutting what they feel they can and increasing the only real revenue stream they have (taxes).

It’s a catch-22 for all sides and I’m glad I’m not making the decisions.
Honey responded:
Posted: May 21st, 2009 at 11:07 am
This is why the republicans have it all wrong…if they’d kept taxes at decent levels when the economy was good, there would be a surplus and they could dip into that instead of raising taxes now.

The same thing happened in Arizona…as soon as they got a surplus they suspended property taxes indefinitely. Guess who’s now in the hole, with one of the highest foreclosure rates in the nation so even if the DO reinstitute property tax it won’t raise any money?

That’s right, Arizona.

Stupid Republicans.
Amy responded:
Posted: May 21st, 2009 at 1:16 pm
I love your blog, because it gives insight into things I am just beginning to learn about and I have learned MANY things here.
Jennifer responded:
Posted: May 21st, 2009 at 4:25 pm
The problem is that the same voters (blindly driven by union propoganda) voted against spending cuts!!

If California doesn’t want to spend less, it has to increase revenue if it doesn’t want to go further in debt.
Dan responded:
Posted: May 21st, 2009 at 5:24 pm
California is about to go bankrupt! Y’all need to cut services or raise taxes.

It sucks when taxes go up, but there ain’t no such thing as a free lunch.
Beks responded:
Posted: May 21st, 2009 at 8:47 pm
Thanks all for your comments! I’m sorry to hear the high taxes are limited to California. I wish the rest of the country had a break!

I’m big on cutting spending rather than raising taxes. California has a HUGE waste problem. As someone who has worked with the government or for the government for years… there are plenty of ways to save.
Jen responded:
Posted: May 22nd, 2009 at 9:31 am
I expect my property taxes to go up here in MA. They keep dropping the assessments, but raising the rates… But, the state cut local aid – cash from the state to the cities and towns – so my town has to try to make up the shortfall. At least in MA we have Prop 2.5, which means a city or town needs a voter override in order to raise the property taxes more than 2.5% (it’s a little more complicated than that, but that’s the jist of it).

On the one hand, it gives residents some control over the taxes they pay, but it can also mean that big, useful projects or necessary initiatives may not get funded, e.g., new school building to replace one that’s falling apart, supplementing budgets for schools, firecighters, and police that would otherwise get deep cuts with a severe loss of service, etc. There’s always the argument that cutting of the supply of money to governments will force them to spend wisely, but I’m skeptical about that. I think spending wisely is a habit that those in charge and the voters just need to have, whether or not their town/city is flush.
Nicole responded:
Posted: May 22nd, 2009 at 7:16 pm
I too voted no on all of the measures. I thought it interesting that he threatened us CA’s with more taxes if we didn’t vote for the tax increases. Isn’t that the same thing?
emmi responded:
Posted: May 23rd, 2009 at 12:11 pm
Ours seem to be the same. But our state doesn’t let voters insist on new services by a 50% +1 vote, while only allowing for additional funding by a 2/3 vote of the legislator. Our state is hurting but it isn’t bankrupt as far as the eye can see, is what I’m saying. I’m sure we’ll see some increase to make up the gap. Hasn’t happened yet.
Rob in Madrid responded:
Posted: May 24th, 2009 at 2:16 pm
unfortunately it is going to get a whole lot worse before it gets better. Its not just the crisis but all those state workers (aka those wonderful baby boomers)begin to retire and need health care. I can’t provide the link but many states and ´cities are looking at budget busting numbers to provide retiree health care.

Even if Rush the mouth Limbaugh won taxes would still go up
morrison responded:
Posted: May 25th, 2009 at 4:20 pm
New York just surpassed California in taxes.

Here’s my post on the subject:
http://alldoorsconsidered.blogspot.com/2009/05/new-york-city-tax-capital-of-world.html

I see I am not alone. All the states will be doing the same.

We have the Dems in charge. This is their scenario: tax and spend.
Ryan responded:
Posted: May 26th, 2009 at 12:29 pm
I think a lot of people miss the no-win situation that states are in, and especially the situation that California is in. People demand a lot of services from the government. As a health care lobbyist I know that medicaid is bankrupting quite a few states. These services are demanded, but no one wants to pay for them. Everyone thinks that there is some unlimited supply of rich people to tax, and it is just not true. The only way to balance the budget is to either cut services, which no one is willing to accept, or raise taxes, which everyone likes to complain about. The situation gets even worse in places like California with the proposition system. The public can collectively create mandates for the state with out figuring out how to fund those mandates… then they complain when their taxes get higher.

Not trying to pick on anyone, but this sort of complaining about taxes while expecting services is hypocritical. What are you willing to give up in order to balance the budget?
Rob in Madrid responded:
Posted: May 27th, 2009 at 1:54 pm
@ morrision

vs borrow and spend republicans unfortunately

The latest issue of Fortune had an excellent article about the next ticking time bomb, State Pensions. Their conclusion, expect the feeds to bail them out. And I would add Obama will halve the deficit in 4 years using the same method every congress did, moving it off the books.

It’s going to take a bit of getting used to not seeing Trica post any more
Tricia responded:
Posted: May 27th, 2009 at 9:00 pm
Hi Rob – You’ll still hear from me. I have an update I’m working on that will be posted Friday!
Debt-free Dan responded:
Posted: May 28th, 2009 at 12:59 am
I’m not feeling it here in Texas. My property tax bill has gone down for the last several years. Property values have remained mostly steady and my tax rate has gone down. However, I think that’s due to lots of growth in my county. Once your county is saturated, I guess the government has fewer options.

I have not specifically noted other taxes rising or services being cut. There is no state income tax in Texas.

I agree that it’s easy to blame politicians for spending money they don’t have. There are a few problems I see.

1. I don’t think there is a concise way to who is voting for what. It’s buried in bills, but at least is accessible.

2. Fewer people are willing to sacrifice their stuff than are willing to demand that others sacrifice. This leads to a stalemate.

3. Because of 1 & 2, people don’t seem willing to punish incumbents for spending by voting them out.

4. I think people who struggle with running their own finances and have a hard time with the concepts of living on their income can’t, won’t or don’t hold politicians accountable.

I don’t know where this country is going to get the money for everything it wants. The longer it waits, the bigger the hole will be.
Ryan responded:
Posted: May 28th, 2009 at 7:54 am
@ Debt-free Dan
There is an interesting phenomenon when you talk to people about congress. When asked, the majority of people do not like and do not approve of congress. However, when you change the question to ask about their own congressman or congresswoman they like that person and think they are doing a great job.