Tax and sequester

The South Pasadena City Council recently heard the city budget might be facing a deficit of more than $1 million driven, in large measure, by pension costs.The budget presentation on March 6 did not require the council to take action but it began the discussion of potential ways to increase revenues, including raising the sales tax, as well as what services might have to be cut.

The total combined sales tax will reach 9.5% after the tax hike. For the California young worker, then, combine sales taxes and federal interest charges and already 13% of her income gone.  Savings rates will never rise with this kind of increasing burden.