Millions of California shoppers and vehicle owners received some uncommon good news from Sacramento on July 1, 2011: tax cuts. On that day, the statewide sales tax rate decreased by one percentage point " a penny on the dollar" and the annual vehicle license fee that drivers pay tumbles by 43%.
The expiring increases, which were put in the books in 2009 as California teetered toward bankruptcy, will offer considerable savings for many individuals. On average, a family of four will save over $1,000 a year when income tax hikes that ended in January areconsidered, according to Republican lawmakers.
"Within a year's time, I know I'll feel the impact on my pocketbook," said Mike Tanner, a 56-year-old retired phone company technician from South Pasadena.
The state sales tax reverts to 7.25%, though many cities add their own levies, and the good news spread across California: All items, a car, a couch, an ice cream cone, will soon cost less. Customers making big-ticket purchases will see the largest difference.
A new car buyer who scoops up a $25,000 vehicle, for instance, will spend $250 less in sales tax. And the lesser yearly vehicle charge falling from 1.15% of a car's worth to 0.65% on the new car will save the owner $125.
The budget that the governor authorized in July boosts vehicle registration fees by $12, but any owner of a car worth over $2,400 will still get a tax cut.
At Goudy Honda in Alhambra, General Sales Manager Michael DeVille has been focusing on creating an advertising campaign around the tax-cut buzz, planning to market the incentive on the web and in newspapers. And every sales person has been imposed with talking to every customer about it.
Yet similar to almost every other promotion, he predicts that this one will lose traction rather quickly as people will become used to the tax cuts. Then, he said, his salesmen will be hustling again just to make a sale.
In Sacramento, Republican lawmakers took a victory lap at a downtown Ford dealership. They declared a "Freedom from Higher Taxes Day" and patted each other on the back for their rejection to replenish the higher tax rates in budget talks this year, which was a top priority of Gov. Jerry Brown and Democrats in the Legislature, who wanted the levies to help balance the state's books.
"We kept politicians out of the taxpayers' wallets," said Assembly Minority Leader Connie Conway (R-Tulare), positioned at a podium in the dealership parking lot.
Assemblyman Tim Donnelly (R-San Bernardino) said the vanishing taxes would be a great asset to a California job market that has gone stale at near 12% joblessness. "The death of these taxes is the rebirth of our economy," he said. Democrats disagreed. They stated letting billions in taxes go to waste as California faces a tremendous deficit amounted to governmental negligence. Many of the steepest spending cuts they enacted in the budget - suspending a program to aid teen mothers, slashing welfare grants by 8% and slicing cash aid for the elderly and disabled also went into action the same day.
The expiring increases, which were put in the books in 2009 as California teetered toward bankruptcy, will offer considerable savings for many individuals. On average, a family of four will save over $1,000 a year when income tax hikes that ended in January areconsidered, according to Republican lawmakers.
"Within a year's time, I know I'll feel the impact on my pocketbook," said Mike Tanner, a 56-year-old retired phone company technician from South Pasadena.
The state sales tax reverts to 7.25%, though many cities add their own levies, and the good news spread across California: All items, a car, a couch, an ice cream cone, will soon cost less. Customers making big-ticket purchases will see the largest difference.
A new car buyer who scoops up a $25,000 vehicle, for instance, will spend $250 less in sales tax. And the lesser yearly vehicle charge falling from 1.15% of a car's worth to 0.65% on the new car will save the owner $125.
The budget that the governor authorized in July boosts vehicle registration fees by $12, but any owner of a car worth over $2,400 will still get a tax cut.
At Goudy Honda in Alhambra, General Sales Manager Michael DeVille has been focusing on creating an advertising campaign around the tax-cut buzz, planning to market the incentive on the web and in newspapers. And every sales person has been imposed with talking to every customer about it.
Yet similar to almost every other promotion, he predicts that this one will lose traction rather quickly as people will become used to the tax cuts. Then, he said, his salesmen will be hustling again just to make a sale.
In Sacramento, Republican lawmakers took a victory lap at a downtown Ford dealership. They declared a "Freedom from Higher Taxes Day" and patted each other on the back for their rejection to replenish the higher tax rates in budget talks this year, which was a top priority of Gov. Jerry Brown and Democrats in the Legislature, who wanted the levies to help balance the state's books.
"We kept politicians out of the taxpayers' wallets," said Assembly Minority Leader Connie Conway (R-Tulare), positioned at a podium in the dealership parking lot.
Assemblyman Tim Donnelly (R-San Bernardino) said the vanishing taxes would be a great asset to a California job market that has gone stale at near 12% joblessness. "The death of these taxes is the rebirth of our economy," he said. Democrats disagreed. They stated letting billions in taxes go to waste as California faces a tremendous deficit amounted to governmental negligence. Many of the steepest spending cuts they enacted in the budget - suspending a program to aid teen mothers, slashing welfare grants by 8% and slicing cash aid for the elderly and disabled also went into action the same day.
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