Sales Tax

California's auto dealers are worried that the state's new budget will put an even bigger dent in already miserable sales. Increases in the sales tax and vehicle license fees were key components of the measure signed by Gov. Arnold Schwarzenegger on Friday. Both raise the cost of buying a car.

Southern California's recession-battered shoppers mostly seemed to shrug in resignation. But Day One of forking over higher state sales taxes on everything from toothpicks to pickup trucks left many venting about the latest economic insult and plotting ways to punch back -- or dodge it. Emerging from the Lakewood Home Depot with cans of spray paint, Richard Dearth said the tax hike of 1 penny per dollar of sales -- bringing Los Angeles County's rate to 9.

Looming over the 405 Freeway near Culver City, a 50-foot-tall electronic sign for Airport Marina Ford has flashed "buy now" in bright red letters for the last month, a reminder to passing motorists to beat the April 1 sales tax increase. "The clock is ticking," said Dan Theroux, general manager of the car dealership. "If you're buying a new car, it's going to save you hundreds of dollars to buy before the end of the month."

President-elect Barack Obama says he is open to new ideas about how to stimulate the economy. I heard him say it on TV. So here's an idea for cranking up cash registers while also helping to bail out California's virtually bankrupt state government. It's not a new idea by any stretch. It's an oldie, but one that makes sense to replay: Simply restore the pre-1986 law that allowed all Americans who itemize on federal income tax forms to deduct their sales taxes.

As revenue-hungry states eye Internet retailers as possible sources of new taxes, Amazon.com Inc. is firing back. Already, the nation's largest Internet retailer has cut ties with its affiliate websites in two states to avoid legislation that would require the company to collect sales taxes from its customers there. And it is fighting similar tax proposals in several other states, including California.

There are million-dollar mansions in foreclosure, layoffs on Rodeo Drive. And reservations are no longer a must at all but the most exclusive restaurants. As recently as the summer, many wealthy Southern California enclaves appeared beyond the reach of the worst recession in decades. But rich cities, it turns out, aren't always so different from the rest.

Re "Gov. pushes hike in sales tax, big cuts," Nov. 7 Now, let's see if I understand this correctly: On Tuesday, Nov. 4, we approved additional sales taxes for Los Angeles County with Proposition R, a 0.5-cent tax on the dollar, plus Proposition 1A for a bullet train for California. Then on Friday, Nov. 7, The Times reported that Gov. Arnold Schwarzenegger is asking for a sales-tax increase -- 1.5 cents on the dollar -- to fund the state coffers. Also in Friday's Times, there is a report that the Department of Water and Power wants to increase our bills so they can install solar panels.

With all the ballots counted, the half-cent sales tax increase for transportation projects in Los Angeles County passed with 67.93% of the vote. The tax hike, known as Measure R, needed two-thirds approval. Measure R is expected to raise $30 billion to $40 billion over its 30-year life span, proponents say. The most expensive project it will fund is an extension of the Westside subway. The increase will begin July 1 and bring the sales tax rate in the county to 8.75%.

We're No. 1 -- only more so. The budget deal that the Legislature reached Thursday will keep California's top personal income tax rate and sales tax rate the highest in the Union. The deal will raise personal income tax rates by 0.25 of a percentage point across the board. The highest rate, on taxable income of more than $1 million, will rise to 10.55% from 10.3%. The next-highest tax rate, on taxable income of more than $94,110 for a married couple filing jointly, will rise to 9.55% from 9.3%.

Gov. Arnold Schwarzenegger unveiled a plan today to radically alter the way Californians pay taxes, calling for a special session of the Legislature to enact changes this year that would take the state off the "roller coaster ride" of boom-and-bust budgets. The proposal immediately came under fire from all sides, including labor unions, business groups and some of the members of the special government commission that produced the report. upon which Schwarzenegger's plan is based.