Treasury Secretary Scott Bessent told reporters that Trump was pausing his so-called ‘reciprocal’ tariffs on most of the country’s biggest trading partners, but maintaining his 10% tariff on nearly all global imports. Import tariffs on goods from China, though, would surge to 125% “effective immediately,” Trump said on social media.

It was seemingly an attempt to narrow what had been an unprecedented trade war between the U.S. and most of the world to one between the U.S. and China.

Global markets surged on the development.

California Democratic Sen. Adam Schiff, a frequent critic of Trump, took to social media to question the administration’s intentions.

“Trump is creating giant market fluctuations with his on-again, off-again tariffs. These constant gyrations in policy provide dangerous opportunities for insider trading,” he wrote. “Who in the administration knew about Trump’s latest tariff flip flop ahead of time? Did anyone buy or sell stocks, and profit at the public’s expense?”

Schiff added “I’m writing to the White House — the public has a right to know.”

Before the pause was announced, Gov. Gavin Newsom put out a call directly to international leaders, urging them to continue thinking of California as a “stable trading partner” regardless of what happens in Washington.

The governor had previously directed the state to pursue international trade relationships outside of the federal government and called on foreign governments to exempt California-made products from retaliatory tariffs the rest of the country may face as a result of Trump’s tariffs.

“Donald Trump’s tariffs do not represent all Americans, particularly those that I represent here in the fifth-largest economy in the world, the state of California,” the governor said in a video posted to social media.

The Trump administration’s about-face on tariffs came after a strong reaction across the global economy.

The tariffs kicked in shortly after midnight, including 104% on products from China, 20% on the European Union, 24% on Japan and 25% on South Korea.

When a downturn appears on the horizon, investors typically crowd into U.S. Treasury notes as a safe haven, viewing the federal government as a source of stability. Not this time. Government bond prices are down, pushing up the interest rate on the 10-year U.S. Treasury note to 4.45% in a sign that the world is increasingly leery of Trump’s moves.

“The market is highly nervous about foreign investors stepping away from the US Treasury debt, which is sending yields sharply higher,” said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities said earlier Wednesday. “Markets more broadly, not just the Treasury market, are looking for signs that a trade de-escalation is coming. Absent any de-escalation, it’s going to be difficult for markets to stabilize.”

The Republican president was publicly defiant as the stock market recovered slightly, then sold off and then bounce back in morning trading. The S&P 500 stock index has fallen more than 18% since Feb. 18 as Trump’s tariff plans crystallized.

Business leaders warned of a likely recession.

JPMorgan Chase CEO and Chairman Jamie Dimon said there would “probably” be a recession, although he also deferred to his economists.“I do think fixing these tariff issues and trade issues would be a good thing to do,” he said in an interview with Fox Business Network’s “Mornings with Maria.”

On CNBC, Delta Air Lines CEO Ed Bastian said the administration was being less strategic than it was during Trump’s first term. His company had in January projected it would have its best financial year in history, only to scrap its expectations for 2025 due to the economic uncertainty.

“Trying to do it all at the same time has created chaos in terms of being able to make plans,” he said, noting that demand for air travel has weakened.

Treasury Secretary Scott Bessent has previously said it could take months to strike deals with countries on tariff rates, and the administration had not been clear on whether the baseline 10% tariffs imposed on most countries would stay in place. But in an appearance on “Mornings with Maria,” Bessent said the economy would “be back to firing on all cylinders” at a point in the “not too distant future.”

He said there has been an “overwhelming” response by “the countries who want to come and sit at the table rather than escalate.” Bessent mentioned Japan, South Korea, and India. “I will note that they are all around China. We have Vietnam coming today,” he said.

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California Gov. Gavin Newsom (D) claimed earlier this year that the “future is electric.” In 2020, he signed an executive order to phase out the sale of all new gasoline-powered cars by 2035. Now, he’s aligned himself with California Republicans to fight a new tax hike. However, unlike the various other tax increases opposed by the state’s Republicans that adversely impact the middle class, the tax hike Newsom has elected to fight would be one specifically imposed on the ultra rich.

The tax hike

Proposition 30 calls for a 1.75% tax hike on those earning over $2 million annually. It has been touted as a means to help subsidize the statewide adoption of so-called “zero-emission” vehicles and the development of EV-charging infrastructure.

According to the California Legislative Analyst’s Office (LAO), the tax hike would go into effect January 2023 and last until California “is able to drop its statewide greenhouse gas emissions below certain levels,” or, failing that, until January 2043.

About 45% of the revenue from the new tax would go toward payments to help buy new electric vehicles (e.g., cars, vans and pick-up trucks). In addition to helping households and businesses “pay for part of the cost of new passenger ZEVs,” money confiscated from high-income taxpayers would also be allotted for the government’s acquisition of large EVs such as trucks and buses.

Another 35% would subsidize the installation and operation of EV charging stations, which will be located in both private and public locations, and 20% would go toward wildfire response and prevention. Priority would be given to expenditures on hiring, training, and retaining state firefighters.

The money will not be disbursed on a consistent basis. Instead, “at least half of the money must be spent on projects that benefit people who live in or near heavily polluted and/or low-income communities.” The affluent areas home to some of those who will be taxed under the initiative will have to compete with rural areas for the remainder of the funds.

The LAO claimed that the tax would raise between $3.5 billion and $5 billion annually, “growing over time.”

The LAO noted that, in light of recent efforts to increase the number of EVs sold and on the roads, “the additional funding from the proposition to help buy new ZEVs would not have much effect on the total number of ZEVs driven in California.” It would, however, “shift who pays for the ZEVs. That is, more costs would be covered by revenue from the new tax on high-income taxpayers instead of by vehicle sellers and/or buyers.”

The tax’s supporters include the CA Association of Electrical Workers, Cal Fire Local 2881, the California Democratic Party, the American Lung Association, Lyft, and a host of municipal authorities across the state.

Neel Sannappa, a Democratic political analyst, claimed the tax would “help middle-class families transition to zero-emission vehicles,” as well as strengthen the electric grid, which is already under immense strain.

The multimillionaire’s Robin Hood

In a television ad attacking the proposition, Newsom suggested that the proposed tax hike was “devised by a single corporation to funnel state income taxes to benefit their company. Put simply, Prop. 30 is a Trojan horse that puts corporate welfare above the fiscal welfare of our entire state.”

The corporation Newsom referenced in the attack ad was Lyft. Newsom and other critics have suggested that Lyft, which has allegedly donated over $35 million in cash and in-kind contributions to support the measure, would directly benefit from it.

The Guardian reported that the perceived benefit to Lyft is that its drivers, who are responsible for their own vehicles, would be better able — as a result of the multi-millionaire-sourced subsidy — to acquire an EV by the state’s 2030 regulatory deadline.

Denny Zane, founder of Move LA, a public transit lobby group, said the accusations were “just false,” noting that Lyft had offered its support only after environmental groups and policy makers had drafted the idea.

Bill Magavern, one of the authors of the bill and the policy director of Coalition for Clean Air, told KUSI that the “initiative was devised by an environmental-labor-business alliance, and it provides absolutely no special benefits to any company or any special interest.”

Magavern characterized Newsom’s opposition as giving in to the wishes of the wealthy: “You’ve got billionaires and their allies who don’t want to pay their fair share of taxes.”

The attack ad featuring Newsom was paid for in part by a California-based billionaire, Michael Moritz, a repeat Lincoln Project donor who has reportedly spent $1 million to fight Proposition 30.

Bob Emery, a wealthy San Francisco real estate investor, donated nearly $500,000 to the opposition campaign. Former Apple board member and Silicon Valley venture capitalist Arthur Rock donated $499,000. Gap Inc. director William Fisher donated $980,000 to the “No on 30” campaign in September.

In addition to the support from the ultra rich, “No on 30” also garnered support from the California Teachers Association, which was antipathetic because 40% of the state’s budget, as mandated in 1998, must go to public education, but as this would be a special fund, revenue might be withheld from education coffers.

Republican political analyst Cathy Abernathy told Fox40 that part of the reason Newsom and the California Teachers Union don’t like the proposition is because it “is a special fund, permanently separate and apart from the General Fund or any other state fund or account. And in Section (c), moneys deposited into the fund and any interest earned shall not be permanently or temporarily borrowed, loaned or otherwise transferred to the General Fund or other fund in the state treasury.”

In other words, the Newsom administration wouldn’t be able to use it as a slush fund.

Proposition 30 will be on the ballot in California in the upcoming November election.

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SACRAMENTO, Calif. (AP) — A California ballot measure that would tax the rich to help put more electric cars on the road may seem tailor-made to win support from Democrats in a state known for climate leadership, but Proposition 30 has one notable opponent: Gov. Gavin Newsom. That’s put the Democratic governor on the opposite side of his own party and against his traditional environmental allies.

The proposition before voters would add a 1.75% tax on personal income of more than $2 million, or fewer than 43,000 people. State analysts estimate it would raise up to $5 billion a year, mostly to help people buy electric vehicles and to build charging stations, with some also dedicated to resources for fighting wildfires.

Environmental and health group backers say California needs dedicated funding to speed the transition away from gas-powered cars and help lower planet-warming emissions. Transportation accounts for 40% of California’s greenhouse gas emissions, and increasingly deadly wildfires are another major source of carbon.

“We can’t meet our climate goals without something like this,” said Mary Creasman, chief executive officer for California Environmental Voters. “It’s either going to be all of us who pays, or it’s going to be the wealthiest who can afford to pay.”

Newsom has branded Proposition 30 as a money grab by ridesharing giant Lyft, which has spent at least $45 million backing it. State regulators have mandated that all rideshare trips be zero-emission by 2030. Uber has not taken a position on the measure.

“Don’t be fooled, Prop. 30′s being advertised as a climate initiative, but in reality it was devised by a single corporation to funnel state income taxes to benefit their company,” Newsom says in one TV ad.

Supporters reject that characterization, saying that Lyft got involved after environmental groups were already discussing a ballot measure. Creasman said it was important to “call our own team and governor out for lying” about the origins of the measure.

In an election year where Newsom is expected to cruise to reelection for a second term, the fight over Proposition 30 has become perhaps the most contentious of the season for Democrats. It comes months after state air regulators approved a Newsom-backed plan to ban the sale of most new gas-powered cars in the state by 2035. Newsom notes that he has already dedicated $10 billion to various programs aimed at boosting EV adoption over the next six years.

Half the money raised in Proposition 30 for electric vehicles would go into an equity account designed to expand transportation options and limit air pollution in low-income or disadvantaged neighborhoods. It could be used to help people buy electric cars or to put cleaner delivery trucks, buses and even e-bikes on the roads.

Wildfires, too, have become an increasingly urgent problem as climate change makes the state hotter and drier. Most of the state’s deadliest and most destructive wildfires have occurred in the last few years, and the state estimates wildfires released more than 85 million metric tons of carbon emissions in 2021 — more than the annual emissions from electricity.

Lyft says it supports the measure because reducing emissions is good climate policy.

“Proposition 30 funds this through a tax on individuals who earn more than $2 million a year. I’m fortunate enough to be impacted by this tax and happy to pay it to help turn back the clock on this existential threat,” Logan Green, the company’s chief executive officer, wrote in a blog post.

Joining Newsom in opposing the measure are the California Teachers Association, the California Chamber of Commerce and some venture capitalists who are helping fund the “No” campaign.

The money raised by the tax wouldn’t count toward a state budget rule that says a certain percentage of revenue must go to K-12 education, a provision the teachers don’t like. Meanwhile, the nonpartisan Legislative Analyst’s Office said the proposal could force lower spending in other areas based on certain budget rules, something supporters of the measure dispute.

Business groups note that California’s personal income tax is already the highest in the nation, and the ballot measure would put it over 15% for the highest earners. Loren Kaye, foundation president for the California Chamber of Commerce, also warned that a rapid expansion of electric vehicles could strain the energy grid, an argument the Newsom administration has rejected.

Backers of Proposition 30 include the California Democratic Party, the Clean Air Coalition, the Natural Resources Defense Council and the American Lung Association, which have rejected characterizations that the measure is designed to benefit Lyft specifically, noting there’s no provision that would expressly set aside money for rideshare drivers.

While Newsom’s existing commitment to electric vehicle infrastructure is significant, the state needs a more stable long-term revenue source, supporters argue. The tax increase would last for 20 years if the measure passes.

“We need a consistent, reliable source of funding that keeps us going through good budget years and bad budget years,” said Bill Magavern, policy director for the Coalition for Clean Air. Referring to Lyft, he added, “If the goal is to limit pollution, does it matter who is driving the EV?”

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California Gov. Gavin Newsom wants voters to reject a new tax on rich people that would pay for more electric vehicles in the nation’s most populous state, warning in a new statewide TV ad that a measure on the ballot this November won’t help the environment but is instead “one company’s cynical scheme to grab a huge taxpayer subsidy.”

Proposition 30 would raise taxes on people who make more than $2 million per year. It would generate up to $5 billion in new tax money each year, and most of that money would go to programs that help people buy electric cars and install charging stations. A smaller amount would go to wildfire prevention response and prevention programs. The ballot measure’s campaign is paid for by the ride-hailing company Lyft. Last year, state regulators ordered companies like Lyft to make sure nearly all of their rides are in electric vehicles by 2030.

Newsom says the ballot measure is Lyft’s attempt to make taxpayers pay for that. Newsom does not mention Lyft by name in the ad, but as he is speaking a headline from the San Francisco Chronicle is displayed in the background that says: “Why is Lyft bankrolling this California ballot measure on electric cars?” Representatives for Lyft did not immediately respond to a request for comment on Monday. Responding to the ad, the Yes on 30 campaign noted it is supported by lots of groups, including the American Lung Association and the California Democratic Party.

“It is disappointing that the Governor would side with the Californian Republican Party and a handful of San Francisco billionaires who would rather kids breathe toxic, polluted air than pay their fair share,” the campaign said in an email to The Associated Press. “The opposition has never been able to point to any actual provision in the measure that provides a special benefit to Lyft or any other interest,” said Bill Magavern, policy director for the Coalition for Clean Air, one of the groups that crafted the measure.

“The money would go to state agencies that the governor himself oversees and would fund existing programs that the governor himself funds through his budget.” Newsom has been a big advocate for electric cars, approving more than $10 billion in new spending over the next several years to accelerate their adoption in California. Last month, California regulators approved new rules that will require new cars, pickup trucks and SUVs be electric, hydrogen or a gas-electric hybrid by 2035. California law lets voters bypass the state Legislature to pass their own laws at the ballot box, typically resulting in several measures each year.

It’s not unusual for governors to campaign for or against these measures. But it’s somewhat rare for governors to appear in TV ads speaking directly to voters about an issue not related to their own election campaigns. “No one has more credibility on this issue than the governor,” said Matt Rodriguez, campaign manager for the No on 30 campaign. “I think you’re going to find the voters of California trust Gavin Newsom on what is the best way to go about addressing climate change.”

Newsom is being challenged in his re-election campaign this year by Brian Dahle, a little-known Republican state senator who hasn’t yet raised enough money to wage a strong statewide campaign. Free from the pressure of a well-funded challenger, the Newsom campaign has so far been spending its money on ads in other states that criticize the Republican governors of Florida and Texas.

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For business owners with EDD audits of their payroll and 1099 contractors whose audits were suspended temporarily, the grace period is over. As of September 2, 2020, EDD has announced that audits that were pending and in process have now resumed. EDD will now, potentially, open new audits of companies who hired 1099 contractors and subsequently had those workers file UI claims with the state alerting EDD to their potential misclassification.

When California businesses hire and classify workers as 1099 contractors based solely on the information collected from those contractors, they run the risk of misclassification. If those 1099 workers subsequently file for unemployment, EDD will open an investigation into the hiring entity. Whether the error was a mistake or a deliberate effort to reduce overhead costs does not matter. The law introduced by Assembly Bill 5 which was signed in January of this year clearly redefines the criteria for contractor classification.

With the upcoming wave of EDD audits, the agency will likely target companies who hired contractors, requiring them to re-classify their workers as W-2 employees and assess payroll taxes, penalties, and interest.

Need a refresher on 1099 vs W-2 classifications check out our article here: https://www.caltaxadviser.com/blog/2020/09/edds-confirms-it-has-resumed-tax-audits/

–Prnewswire.com

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Greetings from the Hemet Car Guy, in past article we discussed people buying cars for their Uber business. And the difficulty getting the loan approved if Uber or Lyft driving is your only means of income at car dealerships usually their lenders only do personal car loans not commercial/business loans.

Fortunately for us at VIP Autos we have lenders that do auto loans that can be put in the business name as long as the business is established with credit or the business owner or CEO or shareholder can cosign.

Purchasing a car for the business has many tax advantages for the owner, whether that owner is the business or an employee. But before you buy that car, consider the pros and cons of having the company or the employee owning the car.

Only actual business use of the car is deductible as a business expense. Commuting expenses between home and business are not deductible business expenses and personal travel is not deductible. Whoever drives the car must keep good records on business travel expenses in order to have those miles allowed as a deduction.

Many banks do have seasoning requirements for small business loans, which means you can only finance a car if your firm has been in business for at least two years. Provide your lender with at least two years of business tax returns and cash flow statements. You need a positive cash flow to get a loan. Depending on the size of the loan, your lender may also ask for a business plan that details the purpose for buying the car.

Buying a car can benefit the company or the employee who owns a business car with the cost savings from tax deductions. This deduction comes in two parts: the deduction for ownership of the car, and deductions for costs of driving the car for business purposes.

• The company can deduct depreciation expenses at the rate in effect at the time the asset is put into service (begins to be used)
• The company can also deduct general auto expenses for business use of the vehicle, like maintenance, gasoline, and tires.
• If the business owns the car, personal use of the car by the employee must be documented and the company must report personal use as taxable compensation on the employee’s W-2.
• Interest on a car loan is deductible to a business as an ordinary and necessary business expense.
• Insurance for a company-owned car may be cheaper than for an employee-owned vehicle since businesses can get leased-car and multiple-car rates and other discounts.
• If a company-owned car is involved in an accident, the driver’s personal insurance rates and liability are minimized.

My tax guy says “For the owner, the cost of the car as a business asset and the costs for business use of the car are both fully deductible from business taxes. For the employee, the cost of the car as an asset is not deductible (even for interest expenses on a car loan). The cost of business driving expenses is reported on Schedule A of Form 1040, but these costs are only deductible if they are greater than 2% of adjusted gross income

No doubt, having the business own the car allows more deductions, such as depreciation. Most of these deductions are not available to individual employees on their personal tax returns.

Here is another example our dealership decided to lease a car for business use. And then have the option to resell it at the end of the lease term. However when you think it through, for some businesses you may not have control over how much mileage the employee puts on that car. For example our car lease term has a 12,000 mileage restriction. If you (as the owner) drives a leased car, you may be able to control personal use and keep costs down. Every situation is different, but consider looking at the leasing option but also know it’s not for everyone.

Besides being the Hemet Car guy, I volunteer by serving on the Board of Directors for the Hemet San Jacinto Chamber of Commerce, I see business owners driving to the chamber events promoting their business and this comes to mind. Are you are using your car for business, it does have its advantages.

Disclaimer: I am not a Tax Guy nor do I play one on TV The information in this article is intended to be for general purposes, and is not intended to be used as tax or legal advice. Every business situation is different and federal and state laws are constantly changing. Please consult your tax or legal advisor before taking any action that could affect your business.

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A Hemet certified tax preparer who filed numerous fraudulent income tax returns, resulting in $2.1 million in losses to the federal government, was sentenced on December 2, 2019 to 3 1/2 years in federal prison.
Dennis L. Reed, 31, pleaded guilty on Sept. 3 to two counts of aiding and assisting in the preparation of false income tax returns.
U.S. District Judge Otis Wright in Los Angeles imposed the sentence recommended by the U.S. Attorney’s Office.

Between 2014 and this year, Reed prepared hundreds of returns that either contained bogus deductions or unwarranted credits, resulting in losses to the U.S. Treasury Department totaling $2,158,337, according to federal prosecutors.
“The victim of (the defendant’s) offense is not simply a faceless bureaucracy, but all the honest and hardworking American citizens and residents who go to work each day and pay their fair share of taxes as the law requires of them,” according to a sentencing memorandum submitted by the U.S. Attorney’s Office.

The defendant prepared close to 400 returns in which he claimed clients earned income from Schedule C sole proprietorships, working as independent hairstylists or in other self-employed capacities, but in many instances, the subjects were not employed at all, according to the U.S. Attorney’s Office.

In other cases, Reed created “phantom business income or losses and claimed false dependents on clients’ tax returns,” generating refunds to which the recipients were not entitled, according to the federal government.
Reed, who charged between $350 and $1,350 per client for his services, never signed the returns he prepared, prosecutors said.
In addition to prison time, Wright ordered the defendant to pay the full amount of losses to the government in restitution.

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A new tax at McSweeney tract goes to improvements and upkeep

McSweeney farms, a local housing tract, has, for some time, been preparing for an expansion, only recently having gotten approval for a developer to build structures allowing for large-scale irrigation that is a lynch-pin to expansion.

Now however, they have received approval to impose a tax that will be paid by the residents of the McSweeney tract itself. This tax, due in-part to the Mello-Roos Act of 1982, is intended to assist public agencies in financing certain public services. This special tax will be placed on the McSweeney district and will cover the costs associated with the maintenance of public improvements, specifically landscaping, street lights, street/curb/gutter maintenance, channel and detention basin facilities, and graffiti maintenance. The costs involves services for landscape maintenance including streetscapes, slopes and medians specifically. Covered as well are: landscaping materials such as turf, ground cover, shrubbery, trees, plants, irrigation and drainage systems, weed control and other abatements, energy, repair/replacement and inspection.

Maintenance, administration and inspection of the storm-water facilities and BMPs includes water-quality basins, and open-space areas. Litter and graffiti removal on sound walls and other amenities, plus normal painting as required are also included. That was a mouthful, but it’s good to know where your money’s going.

Down to the brass “tax.” The cost of the tax will be $155 – $1,705.00 per taxable unit per year for residential units and a “Maximum Special Tax” in the range of $1,522 – $ 1,603 per acre per-year for Multi-Family, Non-Residential and Undeveloped property. The upside to this whole situation is that this maintenance will have little to no fiscal impact on the city itself. Utilizing the Mello-Roos Act, the city won’t have to worry about the funding for McSweeney maintenance.

You can find the details of the tax and how it applies to you on the city’s website. If you want to weigh in on the topic, a public hearing on this matter will take place on December 10, 2019, and at that time City Council will hear any testimony concerning the formation of the tax, and take action to adopt the “Resolution of Formation.” If you want to know before then, speak to one of your council members! Above all else, they are here for us.

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It’s not enough that California already has among the highest income and sales taxes in America, ranking the state No. 11 among the 50 states in terms of overall tax burden. Only the property tax limits of Proposition 13 keep California away from the top of the list.

But this year legislative Democrats, who saw one of their numbers recalled over a smallish 12-cent increase in the gasoline tax imposed two years ago, have sought to charge a slew of new, previously unthinkable taxes.

Their original list included levies on new tires, sugary soda, firearms, water, prescription painkillers, lawyers’ services, car batteries, estates valued at more than $3.5 million, and oil and natural gas extraction.

The water tax to ensure clean drinking supplies everywhere is all but dead, essentially killed by the state’s $21 billion budget surplus. It may morph into a fairly permanent general fund appropriation. The lawyer tax won’t go far. The list is shrinking fast.

Some of these ideas actually might make sense at times when the state is short of cash. Just not when it’s running a huge budget surplus.

The causes behind some of these tax proposals are noble enough, but if lawmakers really want funds for the causes they would help, why not use some of those surplus billions? Or is the state’s rainy-day fund, where most of the extra dollars now go, more important than, say, pure drinking water?

Cleaning up the fouled water now coming from the taps of about 1 million Californians was to be the sole purpose of a new “Safe and Affordable Drinking Water Fund” paid for by a tax on water meters.

The fee on new tires, already $1.75 per tire, would rise to $3.25 in another proposed increase, the money earmarked for grants to prevent zinc-bearing “rubber crumbs” produced by ground-up old tires from fouling ground water supplies and the air. Excess zinc can create kidney and pancreas damage.

The soda tax was back this year for its third go-‘round, sponsored by Democratic Asemblyman Richard Bloom of Santa Monica. This one wouldn’t go to a special fund, but is simply intended to discourage kids and others from consuming too much sugary soda, a leading cause of diabetes, tooth decay and obesity. “We have ignored this crisis too long,” Bloom said in introducing his newest levy, which wasn’t immediately specified, but might amount to 2 cents per fluid ounce, or 24 cents per 12-ounce can, or almost $3 per 12-can case.

The noble causes and good intentions go on almost ad nauseum, but they fly in the face of recent polls, which without exception show California voters believe they are overtaxed.

If voters become truly fed up with having new levies piled on them, there could be significant results at the ballot box, as demonstrated in the Fullerton-based district of recalled state Sen. Josh Newman, who cast the vote many felt was decisive in passing the gas tax increase.

The state tax burden is compounded by the Trump administration’s tax “reforms” passed through a Republican-controlled Congress in 2017, which have been fully felt for the first time this year, cutting deductions for items like property taxes and some home mortgage
interest.

Those impacts are felt more strongly in California than anywhere else.

Only overconfidence and a sense they’ll never lose their jobs over tax increases, no matter how many or how high, can explain politicians continuing to try for new tax increases just as voters are paying more federal taxes and feeling overburdened.

If there were serious competition for political survival in California, these levies would never be proposed. Which means that if Democrats are miscalculating the depth of their support and security, the spate of proposed new taxes could produce some startling political change next year.

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