When California has faced budget shortfalls, some academics and lawmakers have used the shortfalls as pretext to call for a tax on services, purportedly to fix budget volatility. However, a recent report by economist Dr. Justin Adams for the California Foundation for Commerce and Education (CFCE) refutes these claims. The CFCE report examined all recent sales tax on services proposals and found that none of the proposals, no matter how the tax was structured, would solve California’s budget volatility.
The report, a full copy of which is available to the right, also found that imposing a new sales tax on services would create a host of problems for California consumers, taxpayers and businesses. Find out more below.