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Ventura County Perspective

Focus on Real Options That Put Money in Hands of Working Families

Big oil is unlikely to pass on a savings. But child-care credits, returning sales tax to consumers and tax credits for small businesses could help.

September 10, 2000|ROZ McGRATH | Roz McGrath, a Democrat, is seeking election to the California Assembly, District 37

I support tax relief and rebates that will guarantee more money in the pockets of working families and small-business owners, especially at a time of a record state surplus.

Among the tax-reduction proposals I support are child-care credits, the permanent reduction in car registration fees, returning sales tax money to consumers and tax credits for small businesses that provide health care to employees.

Although the proposal to eliminate the gasoline sales tax may be good fodder for press releases and TV sound bites during an election year, the media grandstanding and political gamesmanship of elected officials, both Democrats and Republicans, should not fool us into thinking that such a proposal has a chance of passing, or that it would actually benefit us.

Although I am certainly concerned about the price and availability of gasoline, I strongly doubt that big oil companies would pass along any savings to the people of California, meaning lower prices at the pump.

Our state Legislature should focus on the real options for tax cuts that would actually return surplus dollars to those who work hard for a living.

My thinking on this issue is supported by the Assembly Committee on Revenue and Taxation's analysis of Assembly Bill 1706, the bill to eliminate sales tax on gasoline, which says:

Legislation that would reduce the pump prices paid by California consumers has historically been introduced shortly after spikes in pump prices. In practice, this bill (like other similar bills before it) will have very little effect on the price of a tank of gas for two reasons:

a) Sales tax represents a very small portion of the overall pump price. For example, if pump price equals $1.90 per gallon, only about $0.15 of that is attributable to sales tax. Similarly, if pump price equals $1.20 per gallon, only about $0.10 of that amount is attributable to sales tax.

b) There is very little preventing oil companies from raising their fuel prices to service station owners to make up the difference in price that would otherwise result from repealing sales taxes on fuel.

I want tax cuts that put money directly into the hands of working families. By giving back a portion of child-care costs, we can help middle-class families avoid making the decision to leave young children alone while their parents work to pay the bills and keep food on the table.

Because most families are car owners, I support the permanent reduction in the vehicle license fee that was adopted with this year's budget. Reducing the cost of registering our cars is the kind of direct-benefit tax reduction I support.

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I also support a sales tax rebate. Every person in California pays sales tax on purchases of nonfood items. By sending each family and individual a check for sales taxes paid over the year, we could be sure that money ended up in the hands of those who pay taxes.

Supporting our small businesses with tax credits for providing health care will help both the small-business owners and their employees. With more than 117,000 Ventura County residents having no health care insurance, and most of working people, we must fix our health care system. Because small businesses are the backbone of our economy, we need to find ways to encourage them to provide health insurance.

I support tax relief and rebates that will guarantee more money in the pockets of working families. I cannot support a tax relief measure that would only pad the pockets of the rich oil producers while pretending to benefit working families.

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