HIDDEN TAXES PUSH PRICES HIGHER
California lawmakers know that voters are sick of tax increases, but that hasn’t stopped them from raising taxes. It has simply made them sneakier about it.
The latest example is a new plastics tax imposed on the manufacturers of single-use plastic packaging and single-use plastic food ware. Governor Gavin Newsom signed Senate Bill 54 into law in June, and now the makers of plastics used widely in consumer products and food service will have to pay a combined $500 million per year to a new state fund. They will also have to comply with costly new regulations and reporting requirements. Violations will cost the companies $50,000 per day in fines.
The cost of doing business always finds its way into consumer prices, but state politicians are trying to conceal the fact that SB 54 will make consumer goods and carryout food more expensive. Plastics producers will be required to pay a share of the industry’s $500 million annual tax, but the law demands that “the fee shall not be passed on to consumers as a separate item on a receipt or invoice.”
Just because you don’t see it on the receipt or invoice doesn’t mean you’re not paying it.
A new tax on single-use plastic food ware is one more burden on California’s hard-hit restaurant industry, already reeling from the pandemic and its aftermath. Restaurant owners who invested to expand their takeout and delivery options will now face higher costs for the materials that make that business possible.
The cost of gasoline is another example of hidden taxes driving up prices. In addition to the sky-high gas tax in California, now 53.9 cents per gallon, an estimated 25 cents per gallon in hidden taxes is added to the price by the state’s cap-and-trade program, which was intended to address climate change. The program requires utilities and manufacturers to buy a costly permit for each ton of greenhouse gases they emit in California. Refineries must obtain the permits for making transportation fuels.
The money from the sale of the permits goes into the state’s Greenhouse Gas Reduction Fund, and the governor and the State Legislature decide how to spend that money. They decided years ago that 25 percent of the revenue paid into the Greenhouse Gas Reduction Fund should go toward building the bullet train. You’re paying for the boondoggle high-speed rail project with every fill-up.
At a time of roaring inflation, the last thing Californians need is higher consumer prices because of hidden taxes. Even though these programs may have begun with good intentions, hidden taxes raise the already high cost of living in California and increase the state’s poverty rate, which, according to the U.S. Census Bureau, is the highest in the nation when the cost of living is taken into account.