Wednesday, August 27, 2014

California Death Wish - Gas Pricing Going Up A Dollar Or More

Effective January, 2015 California will impose new taxes on gasoline that could raise prices by a dollar or more.  California already collects about 68 cents a gallon making the gas tax in California one of the highest.  This new tax will push gas prices above $5.00 a gallon which will be a real job killer.  This will hurt Southern California most, since public transportation is less available, or practical there given the distances that people travel to work.

Companies and jobs have been leaving California for more than 20 years as a result of high taxes and onerous regulations that make doing business in California difficult.  Every year, the state legislature adds more burdens to business, which is the reason companies continue to vote with their feet.  The latest large scale migration is Toyota relocating their US headquarters and about 5,000 jobs to Texas in the next few years.  Those are good paying jobs that will never return to the state.

But it is the tip of a huge iceberg.  Thirty years ago there were about 250 major companies headquartered in California and about 80 headquartered in Texas.  Today, that number is around 100 in California and 225 in Texas.  And, of the large companies that remain in California most maintain a relatively small corporate headquarters, since they have moved operations out of state, or out of the country to avoid California taxes and regulations. 

This increase in the gas tax will hit the Poor and the Middle Class hardest by reducing their disposable income.  Salaries are not going up so this means that these people will have fewer dollars to spend on housing, recreation and basic necessities.  It is just Economics 101.  Raising the gas tax in California will be a job killer.  The Socialists, Public Employee Unions and Environmental Wackos running California just don't get any of this.  California is fast becoming the land of the rich in their second homes in gated communities, the poor on the dole and a dwindling Middle Class.  This is what happens when Socialists control all the levers of government as they bankrupt the state taking care of their PEEP's that keep them in power.  In doing so, the Middle Class gets screwed. 

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