A reader points us to two ballot initiatives hiking taxes on parking lots and rental cars in San Mateo County, California that failed on Tuesday. Measure Q would have imposed an 8% gross receipts taxGross receipts taxes are applied to a company’s gross sales, without deductions for a firm’s business expenses, like compensation, costs of goods sold, and overhead costs. Unlike a sales tax, a gross receipts tax is assessed on businesses and applies to transactions at every stage of the production process, leading to tax pyramiding. on commercial parking facilities (San Francisco International Airport is located in San Mateo County), which failed by a vote of 47.9% to 52.1%. Measure R would have imposed a 2.5% gross receipts tax on rental cars, but failed 47.5% to 52.5%. The county hoped to use the $28 million raised by the taxes to close its budget shortfall.
Excise taxes like taxes on rental cars are increasingly used as a way to shift punitive taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. burdens to non-constituents like tourists. This is dangerous because it allows people to consume more government than they are willing to pay for, and assume incorrectly that there is such a thing as a free lunch. If San Mateo County’s taxes aren’t enough to cover the spending San Mateo County citizens want, they should either be willing to raise broad-based taxes on everyone or cut spending.
After all, we’re all tourists to everyone else, and if everyone shifts huge taxes to tourists, we all pay in the end.
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