Letters to the editor
May 7, 2008
Taxes as a tool to fix economy
Re "Gov.'s staff exploring new taxes," May 2
The only proven solution to California's budget deficit is a sustained economic recovery. A sales tax on services would impede that recovery.
Increasing the price of services in California by 8% would cause consumers to use less of those services. Many California businesses would face an immediate 8% competitive disadvantage to companies in other states.
A services tax discriminates against small businesses. Although national companies would use their in-house legal and accounting services or those in other states, small businesses would be stuck with higher prices they couldn't afford.
Businesses and individuals who share in the ever-rising cost of healthcare would be further priced out of the market. Entertainment and tourism would suffer dramatically.
There is a reason that other large states have repealed their service taxes. These taxes simply do not work, and our economy cannot afford them.
Allan Zaremberg
Sacramento
The writer is chief executive of the California Chamber of Commerce.