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California Gasoline Tax AND Car Registration Tax to Increase

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In the event FWer's want to plan accordingly, the California Legislature's super-Democratic majority recently passed Senate Bill 1  that will raise gasoline taxes and vehicle registration fees.  California Governor Jerry Brown has been aggressively attempting to rally support for this tax increase for the last couple of months.

Excerpt below is from the Desert Sun newspaper http://www.desertsun.com/story/news/politics/2017/04/07/california-gas-tax-transportation-funding/304832001/ 

"The tax increases will take effect November 1 and new vehicle registration fees will begin Jan. 1, 2018. Fees on zero-emission vehicles will take effect July 1, 2020, according to the text of the bill.To raise a projected $52.4 billion over 10 years, changes to taxes and fees include: 

  • A 12-cent increase in the gasoline excise tax
  • A 20-cent increase in the Diesel excise tax
  • A 5.75 percent increase in the Diesel sales tax
  • A new vehicle fee, which will annually charge drivers between $25 and $175, depending on the value of the vehicle
  • A $100 annual fee on zero-emission vehicles 

The vote brings California's gas excise tax to 30 cents per gallon.

As the Desert Sun article notes, environmentalists were unhappy about an amendment to the bill that eliminated a provision that would have resulted in older polluting heavy duty trucks being taken off the road.

It seems to me that the trucker's union apparently gave more money to the "super majority" politicians for their re-election than the environmentalists.

Below is a link to the official government website that provides contact information (email and/or phone number) for California's  legislative representatives in the event you wish to share your views on the subject:

http://www.legislature.ca.gov/legislators_and_districts/legislators/your_legislator.html


 

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The money from this tax is supposed to go towards road repairs, but the money will ultimately be diverted and used to pay for the bullet train (aka the crazy train) that no one wants.

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examiner44 said:   The money from this tax is supposed to go towards road repairs, but the money will ultimately be diverted and used to pay for the bullet train (aka the crazy train) that no one wants.
A few sites are reporting that the increased gasoline and car registration taxes will be diverted to help shore up the California Public Employee's Retirement System:

For example  :http://stonegaitinstitute.org/2017/01/19/california-governor-propose-enormous-increase-in-gas-tax-and-registration-fees/ 
makes this observation:

" California's ..draft budget for 2018 asks for a $524 million increase in public pension spending, an 11% increase over last year’s costs.Gov. Brown doesn’t have many other realistic avenues for expanding tax revenue. California already has the highest personal tax rate in the nation, 13.3% of income, as well as one of the highest corporate tax rates in America.The pension program, which cost the state $5.3 billion last year, is completely unsustainable. The CalPERS board decided late last year to reduce the $305.5 billion pension fund’s assumed rate of return from 7.5% to 7.375%, causing the state’s contribution to the pension fund to go up by $2 billion in the 2019-‘20 fiscal year.

.... According to calculations using Stanford University’s “U.S. Pension Tracker,” if the actual rate of return were 2.75 percent, a more realistic goal in the foreseeable future, the state would have an unfunded debt equaling about $92,748 per household in the state.
In short, Gov. Brown is between a rock and a hard place, and Californians are going to have to pay the price for the bloated system of the state’s public pension system."  


 

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Move?

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This reeks of Gray Davis and the recall election that gave us the Governator in 2003.

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Re-elect the Governator. He repeals vehicle taxes and that's about it.

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Well, the gas is cheaper here in Central Florida...however...no highways or streets are lit at all....kind of like Albania....

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Good start. Now, a reasonable federal gas tax (around $3-4/gallon), rebated back to taxpayers on a per capita basis, and we've actually got a decent path toward mitigating the negative externalities of driving.

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Ultimately the goal is to get to a Vehicle Miles Traveled fee which would make the most sense due to the increase in hybrid vehicles that are heavier than their predecessors yet pay less into the road system. Rather than the 30 cents per gallon, a two cent per mile charge would be transparent and cover additional maintenance expenses as a lot of California freeways are over 50 years old. 

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calwatch said:   Ultimately the goal is to get to a Vehicle Miles Traveled fee which would make the most sense due to the increase in hybrid vehicles that are heavier than their predecessors yet pay less into the road system. Rather than the 30 cents per gallon, a two cent per mile charge would be transparent and cover additional maintenance expenses as a lot of California freeways are over 50 years old. 


I'm pretty sure the average prius weighs less than the average SUV. I don't think their weight is a valid problem.

Hybrids do pay less in gas taxes.

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California needs much better public transit to reduce car use/traffic congestion/emissions, more than anything else. The state of public transit in Californian cities compared to other major cities in the country is laughable.

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bighitter said:   

  • A 12-cent increase in the gasoline excise tax
  • A 20-cent increase in the Diesel excise tax
  • A 5.75 percent increase in the Diesel sales tax

 
It seems to me that the trucker's union apparently gave more money to the "super majority" politicians for their re-election than the environmentalists.

 

 Are you suggesting that the trucker's union supports this increase in Diesel tax?

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ZenNUTS said:   Move?
  Correct, no one forces anyone to live in CA

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rufflesinc said:   
ZenNUTS said:   Move?
  Correct, no one forces anyone to live in CA

  Yea baby!! I am with you. Love it or leave it!!  Because of my job I have lived in 12 states and visited nearly all; Retired in California on the central coast. No state comes close.

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bopc1996 said:   
rufflesinc said:   
ZenNUTS said:   Move?
  Correct, no one forces anyone to live in CA

  Yea baby!! I am with you. Love it or leave it!!  Because of my job I have lived in 12 states and visited nearly all; Retired in California on the central coast. No state comes close.

  Strange, most people work in CA and retire elsewhere.

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Increasing minimum wage to $15 won't help many that have to pay all the additional taxes.

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rufflesinc said:   ...
  Strange, most people work in CA and retire elsewhere.



Most people in CA do not move out of state when they retire. Many might do so, but not most.

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no comment,,,,LOL..enjoy !!

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The money to repair infrastructure has to come from somewhere, and gas taxes -adjusted for inflation - have fallen a lot over the years. This makes sense. They're even doing a similar increase in TN, which is a deep red state.

Personally, I would like the gas tax to be tied to the gas price. Set a floor on gas prices of $3.50 per gallon, and a ceiling of $4.50. If the gas price drops lower, taxes go up to keep the price at $3.50. The money goes into a pool, which is used to support a rebate on gas prices if prices rise above $4.50.
At that price point, it will actually have some impact on people's driving habits (ie slow the proliferation of people driving thier briefcases to work in a 4x4 truck), yet provide the benefit of stabilizing gas prices for businesses.

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misterphillip said:   Well, the gas is cheaper here in Central Florida...however...no highways or streets are lit at all....kind of like Albania....
  Thats what high beams are for
NHTSA said: At night, when you can see only as far as your headlights allow, the situation is worse. our low beam headlights will allow you to spot an object on the road about 160 feet ahead of your vehicle. Most drivers need about 1.5 seconds to react.

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dubs

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misterphillip said:   Well, the gas is cheaper here in Central Florida...however...no highways or streets are lit at all....kind of like Albania....


Street lighting in CFL is funded from local property taxes and tax assesments, not gas taxes.

source: http://www.occompt.com/comptroller/finance/mstu/

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I find it hilarious that in a state that is all snoody about being all for the environment, they are home to the city with the worst traffic (LA) with the least means of public transportation. The stupidity is mind boggling.

bopc1996 said:   
rufflesinc said:   
ZenNUTS said:   Move?
  Correct, no one forces anyone to live in CA

  Yea baby!! I am with you. Love it or leave it!!  Because of my job I have lived in 12 states and visited nearly all; Retired in California on the central coast. No state comes close.

  
I might consider retiring in California if EVERY SINGLE one of my investments/retirement accounts were After-Tax / ROTH. 

Other than that, you would be incredibly stupid to retire in a state with the highest income tax... unless of course, you don't have any income.

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bighitter said:   
examiner44 said:   The money from this tax is supposed to go towards road repairs, but the money will ultimately be diverted and used to pay for the bullet train (aka the crazy train) that no one wants.
A few sites are reporting that the increased gasoline and car registration taxes will be diverted to help shore up the California Public Employee's Retirement System:

For example  :http://stonegaitinstitute.org/2017/01/19/california-governor-propose-enormous-increase-in-gas-tax-and-registration-fees/ 
makes this observation:

" California's ..draft budget for 2018 asks for a $524 million increase in public pension spending, an 11% increase over last year’s costs.Gov. Brown doesn’t have many other realistic avenues for expanding tax revenue. California already has the highest personal tax rate in the nation, 13.3% of income, as well as one of the highest corporate tax rates in America.The pension program, which cost the state $5.3 billion last year, is completely unsustainable. The CalPERS board decided late last year to reduce the $305.5 billion pension fund’s assumed rate of return from 7.5% to 7.375%, causing the state’s contribution to the pension fund to go up by $2 billion in the 2019-‘20 fiscal year.

.... According to calculations using Stanford University’s “U.S. Pension Tracker,” if the actual rate of return were 2.75 percent, a more realistic goal in the foreseeable future, the state would have an unfunded debt equaling about $92,748 per household in the state.
In short, Gov. Brown is between a rock and a hard place, and Californians are going to have to pay the price for the bloated system of the state’s public pension system."  


 

  
So essentially, how hard can we push the rock (the people/companies paying taxes) without pushing the rock over the edge. Might as well be playing a game of chicken or Russian roulette because that's a recipe for failure. 

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justignoredem said:   I find it hilarious that in a state that is all snoody about being all for the environment, they are home to the city with the worst traffic (LA) with the least means of public transportation. The stupidity is mind boggling.
  
https://fivethirtyeight.com/datalab/how-your-citys-public-transi...

LA is #15 nationally in usage of public transit.   SF is #2.

LA's public transit could certainly be improved with a subway / rail system.   They could probably pass massive taxes to pay for that ... or just use the buses.


 

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jerosen said:   
justignoredem said:   I find it hilarious that in a state that is all snoody about being all for the environment, they are home to the city with the worst traffic (LA) with the least means of public transportation. The stupidity is mind boggling.
  
https://fivethirtyeight.com/datalab/how-your-citys-public-transit-stacks-up/

LA is #15 nationally in usage of public transit.   SF is #2.

LA's public transit could certainly be improved with a subway / rail system.   They could probably pass massive taxes to pay for that ... or just use the buses.


 

  LA just passed a massive tax increase (sales tax) to fund public transit.  they did that awhile back but the tax payers didn't get what was promised. It's probably going to be the same thing.
 

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justignoredem said:   
bighitter said:   
examiner44 said:   The money from this tax is supposed to go towards road repairs, but the money will ultimately be diverted and used to pay for the bullet train (aka the crazy train) that no one wants.
A few sites are reporting that the increased gasoline and car registration taxes will be diverted to help shore up the California Public Employee's Retirement System:

For example  :http://stonegaitinstitute.org/2017/01/19/california-governor-propose-enormous-increase-in-gas-tax-and-registration-fees/ 
makes this observation:

" California's ..draft budget for 2018 asks for a $524 million increase in public pension spending, an 11% increase over last year’s costs.Gov. Brown doesn’t have many other realistic avenues for expanding tax revenue. California already has the highest personal tax rate in the nation, 13.3% of income, as well as one of the highest corporate tax rates in America.The pension program, which cost the state $5.3 billion last year, is completely unsustainable. The CalPERS board decided late last year to reduce the $305.5 billion pension fund’s assumed rate of return from 7.5% to 7.375%, causing the state’s contribution to the pension fund to go up by $2 billion in the 2019-‘20 fiscal year.

.... According to calculations using Stanford University’s “U.S. Pension Tracker,” if the actual rate of return were 2.75 percent, a more realistic goal in the foreseeable future, the state would have an unfunded debt equaling about $92,748 per household in the state.
In short, Gov. Brown is between a rock and a hard place, and Californians are going to have to pay the price for the bloated system of the state’s public pension system."  


 

  
So essentially, how hard can we push the rock (the people/companies paying taxes) without pushing the rock over the edge. Might as well be playing a game of chicken or Russian roulette because that's a recipe for failure. 

  considering the skyrocketing property values and growth of tech companies, i'd say they can push that rock pretty far.

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Oh boy, can't wait for $5 per gallon on our next trip to the coast.

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justignoredem said:   ...
I might consider retiring in California if EVERY SINGLE one of my investments/retirement accounts were After-Tax / ROTH. 

Other than that, you would be incredibly stupid to retire in a state with the highest income tax... unless of course, you don't have any income.

  
Theres a lot more to taxes than the top marginal rate.

Married couple with $50k income in CA from half SS  and half IRA would pay ~$250 a year in income tax to CA.    
In Oregon that same couple pays $1600.      Oregons 9% rate comes in relatively low and CA's taxes  are much more progressive.
Theres probably several states with fairly moderate income tax rates that would actually charge more than CA.

Californias who have been long time residents may also have relatively cheap property taxes.   Total tax burden on retired couple could very well be less in CA than in TX in some situations.

Of course if you're high income you get hit pertty bad in CA and I"m not arguing CA is cheap but its not just about the top marginal rate and it all depends on the details.   
 

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jerosen said:   
justignoredem said:   ...
I might consider retiring in California if EVERY SINGLE one of my investments/retirement accounts were After-Tax / ROTH. 

Other than that, you would be incredibly stupid to retire in a state with the highest income tax... unless of course, you don't have any income.

  
Theres a lot more to taxes than the top marginal rate.

Married couple with $50k income in CA from half SS  and half IRA would pay ~$250 a year in income tax to CA.    
In Oregon that same couple pays $1600.      Oregons 9% rate comes in relatively low and CA's taxes  are much more progressive.
Theres probably several states with fairly moderate income tax rates that would actually charge more than CA.

Californias who have been long time residents may also have relatively cheap property taxes.   Total tax burden on retired couple could very well be less in CA than in TX in some situations.

Of course if you're high income you get hit pertty bad in CA and I"m not arguing CA is cheap but its not just about the top marginal rate and it all depends on the details.   

  
Or... and here's a better option.... Choose a state that doesn't have an income tax, since no one should be taxed on their income in the first place. 

You are absolutely insane if you think CA taxes will ever be less than TX in any way, shape, or form.

0% Income tax
Mid to high property taxes, but ridiculously low property values easily counter balances to $1M+ trailer park equivalent homes in CA.
Sales consumption tax of 8.25%

I just find it sad and pathetic when jurisdictions seem to have something against people making money. If you offer no drive or incentive to go up the ladder, people won't. Part of the reason I feel all of our taxes should be consumption based.

 

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This site says your example couple would pay only $172 to California: https://smartasset.com/retirement/california-retirement-taxes
Also "only" $1281 to Oregon, and $463 in Colorado on those pages.

Anyway, it's an excellent point about needing a wholesale review of tax impact when you're thinking about retiring. Property taxes can also have significant exemptions for seniors too. Tax friendliness/hostility while you're in top earning years don't mean a great deal for retirement.

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I love a good pro/con CA/TX fight as much as the next guy but can we get back to discussion of the tax? What portion will be borne by gas cos and what portion by end users?

What are some valid strategies to minimize the hit? Any ways to safely increase gas mileage?

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misterphillip said:   Well, the gas is cheaper here in Central Florida...however...no highways or streets are lit at all....kind of like Albania....In the future, Florida will be kind of like Elbonia...

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justignoredem said:   
 

You are absolutely insane if you think CA taxes will ever be less than TX in any way, shape, or form.

  That says a lot more about the relatively desirably of the two geographic locations, politics and laws aside. CA manages to have relatively high taxes yet people keep wanting to live there. Nobody would live in TX if it had the same taxes .
I just find it sad and pathetic when jurisdictions seem to have something against people making money. If you offer no drive or incentive to go up the ladder, people won't. 
Because the higher the income, the more likely it was due to luck . Simple economics says that competition would drive down high incomes as other people enter the market.
 

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justignoredem said:   You are absolutely insane if you think CA taxes will ever be less than TX in any way, shape, or form.

 

  

I'm not saying CA is lower tax than TX in general of course.     

But in certain circumstances people can pay lower taxes in CA than TX.   Admittedly the best example of that involves buying your house in CA a few decades ago...   But we ARE talking about retirees here.   Or gasoline tax... whichever.
 

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justignoredem said:   I just find it sad and pathetic when jurisdictions seem to have something against people making money. If you offer no drive or incentive to go up the ladder, people won't. Part of the reason I feel all of our taxes should be consumption based.

 

  

yet somehow people in  CA still manage to succeed in life.

 

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jerosen said:   
justignoredem said:   I just find it sad and pathetic when jurisdictions seem to have something against people making money. If you offer no drive or incentive to go up the ladder, people won't. Part of the reason I feel all of our taxes should be consumption based.

 

  

yet somehow people in  CA still manage to succeed in life.

 

  based on tech industry and real estate prices, I'd say more than people in TX. TX has to offer people incentive to move there. Nobody would live in TX without the low taxes

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justignoredem said:   
jerosen said:   
justignoredem said:   ...
I might consider retiring in California if EVERY SINGLE one of my investments/retirement accounts were After-Tax / ROTH. 

Other than that, you would be incredibly stupid to retire in a state with the highest income tax... unless of course, you don't have any income.

  
Theres a lot more to taxes than the top marginal rate.

Married couple with $50k income in CA from half SS  and half IRA would pay ~$250 a year in income tax to CA.    
In Oregon that same couple pays $1600.      Oregons 9% rate comes in relatively low and CA's taxes  are much more progressive.
Theres probably several states with fairly moderate income tax rates that would actually charge more than CA.

Californias who have been long time residents may also have relatively cheap property taxes.   Total tax burden on retired couple could very well be less in CA than in TX in some situations.

Of course if you're high income you get hit pertty bad in CA and I"m not arguing CA is cheap but its not just about the top marginal rate and it all depends on the details.   

  
Or... and here's a better option.... Choose a state that doesn't have an income tax, since no one should be taxed on their income in the first place. 

You are absolutely insane if you think CA taxes will ever be less than TX in any way, shape, or form.

0% Income tax
Mid to high property taxes, but ridiculously low property values easily counter balances to $1M+ trailer park equivalent homes in CA.
Sales consumption tax of 8.25%

I just find it sad and pathetic when jurisdictions seem to have something against people making money. If you offer no drive or incentive to go up the ladder, people won't. Part of the reason I feel all of our taxes should be consumption based.

 

 This is why CA is a poor state, because people aren't climbing the income ladder there? In Silicon Valley, where there's a huge number of tech startups? 
San Diego, LA and San Francisco are poor cities, with a disproportionate share of blue collar workers?
And more people in TX have climbed that ladder?

Here's a link for some high-level stats comparing white vs blue collar workers in various states. CA has a significantly higher ratio of white collar workers (defined as professionals/managers in this data) than TX:

http://kff.org/other/state-indicator/blue-and-white-collar-worke... 

I think it's fairly obvious that the different taxation philosophies have not hurt upward mobility one bit in CA.
What it HAS done is roll a very high burden of taxation on the poor in TX, which hinders them from getting the chance to climb the ladder. You can't pay for higher education if the state takes every cent you could save from your $10/hour wage.

The gas tax is somewhat regressive, but 12 cents/gal is fairly insignificant either way. 

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jerosen said:   
justignoredem said:   You are absolutely insane if you think CA taxes will ever be less than TX in any way, shape, or form.

 

  

I'm not saying CA is lower tax than TX in general of course.     Yes of course in most places real estate is 

But in certain circumstances people can pay lower taxes in CA than TX.   Admittedly the best example of that involves buying your house in CA a few decades ago...   But we ARE talking about retirees here.   Or gasoline tax... whichever.

  The real estate property tax in Texas is 3.5 times that of a California. Yes of course real estate is more expensive in California  because of quality of life and demand. 

Skipping 100 Messages...
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NEDeals said:   
misterphillip said:   Well, the gas is cheaper here in Central Florida...however...no highways or streets are lit at all....
  
Sounds good to me, cut the light pollution, actually be able to enjoy the natural night Sky, less air pollution, less energy consumed, fewer greenhouse gases.  If only we could get that to catch on elsewhere...

  Hang traffic lights on a wire like an old pair of shoes.

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