Taxing Some Services Could Help if It's Fair and Simple

By Annette Nellen, New America Foundation San Jose Mercury News | June 29, 2008 Accompanied by a rate reduction and simplification efforts, taxing services can help rebuild California's tax base and alleviate its budget problem. California State Board of Equalization Chair Judy Chu believes it is time to address our deficit and modernize our sales tax by applying it to services. Her call to modernize our sales tax would be a good start in addressing an underlying cause of our budget problems. Taxing services is not an outlandish idea. Most states already tax more types of services than does California. Taxing services is also not a bad idea. Lifestyle changes have led us to spend less on goods subject to California sales tax and more on non-taxable services. For example, two-earner households have greater needs for laundry... [read full story]