By now you’ve experienced the sticker shock of seeing your first paycheck of 2013 and higher Social Security taxes. If you live in California and have bought a new car or truck you’ve definitely seen how sales taxes have increased. If you are rich, you’ll also be paying a lot more state income taxes. Just ask golfer Phil Mickelson who is now looking to follow Tiger Woods in heading to the “less taxing” havens such as Florida. When Phil goes to sell his house in Rancho Santa Fe he’ll also have to cough up an extra 3.5% as part of the new Medicare tax ($3,500 per $100,000, or an extra $245,000 on the sale of Phil’s $7,000,000 home).
To spice things up a bit, you are also going to be paying higher taxes on lumber and paint. Yes, California added a new 1% tax on lumber. This new tax has lumberyards and hardware stores, still struggling to bounce back from the housing slump, dismayed. Assembly Bill 1492 also has some hidden costs (surprise). The new tax applies to lumber and products that are at least 10% wood but there is a list of exclusions including doors, moldings and firewood. Wood shingles and fencing are taxed, unless the fence is made from re-manufactured wood – go figure.
The tax is projected to affect 200,000 contractors and stores and raise about $35,000,000 to replenish the dry coffers of the state Department of Fish and Wildlife, Department of Conservation, Department of Forestry and Fire Protection and the State Water Resources Control Board, all of which have a hand in regulating timber harvesting plans – and all of whom are not traditional “friends” of new development. This tax comes on top of the new quarter-percent sales tax increase California voters just approved with Proposition 30. Interestingly, AB 1492 was a success for California logging companies because it will eliminate the fee California companies had to pay for harvesting permits, which can be as high as $5,000, by passing the bill to consumers through the new tax. This supposedly level’s the playing field with out-of-state timber companies that don’t pay the fees.
Again it should not come as a surprise that the new law and tax will save the state’s largest lumber producer Sierra Pacific Industries about $250,000 a year. In protest of the new law and the timber industry’s lobbying that helped it pass, Eric Almquist, who owns Almquist Lumber in Arcata, said he stopped buying from Sierra Pacific — formerly a primary vendor. Another new law called the “Paint Stewardship Law” was passed in 2010 and is just now being implemented. Assembly Bill (AB 1343) is also known as the paint recovery act – making California the second state in the nation to adopt this type of stewardship legislation.
Modeled after Oregon’s paint recycling bill, this measure requires paint manufacturers to develop and implement a program to collect, transport and process post-consumer paint to reduce the costs and environmental impacts of its’ disposal. The program is called Paintcare. It is a nonprofit established through a bill endorsed by the American Coating Association (ACA), the California Department of Environmental Quality (DEQ) and Metro regional governments. The new bill will help recover a significant amount of unused paint for proper disposal. Post-consumer paint is the largest component of local household hazardous waste (HHW) collection programs and is costly to manage. In California, post-consumer paint represents 35 percent of the HHW volume collected by local governments. In 2008, more than 26 million gallons of paint were collected in California, costing local governments more than $27 million. Looking at the country as whole, the U.S. EPA estimates that about 10 percent of all paint purchased becomes leftover – around 64 million gallons annually. The cost for municipalities to manage leftover consumer paint averages $8 per gallon, making paint a half-billion-dollar-per-year management cost. Paintcare is funded by sales of paint throughout the state, with fees ranging from 35 cents to $1.60 per gallon, depending on the size of the container purchased. See (http://www.paintcare.org/california/index.php) for used paint drop off sites in your neighborhood.
Taxes, taxes and more taxes. It shall be interesting to see how many more taxes Californians will tolerate before they scream from their homes, “I’m mad as hell and I’m not going to take it anymore.” Or maybe Californians will just end up like the boiled frog.