PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Increased Governmental Burdens to Hit on July 1st in Various States

By at 30 June, 2019, 9:20 am

by Raymond J. Keating-

American independence was declared and fought for, in part, as a tax revolt. Of course, given the tremendous tax burdens placed on individuals, families, entrepreneurs, investors and businesses today, that historical fact could be lost on many.

For good measure, just three days before we celebrate Independence Day, various tax increases – in particular, fuel taxes – will go into effect in assorted spots across the nation.

Indeed, July 1st will be a day for increased governmental costs – via taxes and regulations.

For example, in California, the state’s gas tax, which jumped by 12 cents per gallon in November of 2017, will increase by another 5.6 cents per gallon. That means that California will impose the highest state gax tax in the nation.

In Illinois, the gas tax will double – from 19 cents per gallon to 38 cents – on July 1st. But there’s more, as reported by the Illinois Policy Institute:

The state motor fuel tax will also be tied to inflation, meaning it will automatically rise in future years without lawmaker approval. The hike will cost the typical driver around $100 more in its first year.

     “The state-level gas tax hike is estimated to generate an additional $1.2 billion – split between the state ($560 million) and local governments ($650 million).

     “In addition to the state-level increase, the bill allows Chicago to increase its local gas tax by 3 cents. It allows Lake County and Will County to impose a gas tax of up to 8 cents per gallon. And DuPage, Kane and McHenry counties would be able to double their 4-cent-per-gallon gas taxes to 8 cents. These additional hikes may end up making Illinois’ average state and local gas tax burden the highest in the nation.”

Ten other states also will be increasing gas and/or diesel taxes on July 1st. Ohio would be another state with big hikes – 10.5 cents more per gallon of gas, and 19 cents more per gallon of diesel.

New Mandates and Regulations Add to Small Business Burdens

Of course, governmental burdens don’t stop with taxes. There also are regulations and mandates – just as or even more burdensome than taxes, according to many small business owners – including the minimum wage mandate. Some state minimum wage mandates are set to increase on July 1 as well.

An assortment of localities in California – yes, again – will increase their government-mandated minimum wages based on firm size, benefits provided, and/or industries. The California state minimum wage increased to $12 per hour for businesses with 26 or more employees, and to $11 for those with 25 or fewer workers, at the start of 2019. The new local mandates will range between $13.25 to $20.

In New Jersey, the state minimum wage will increase from $8.85 per hour to $10 per hour on July 1st.

And the minimum wage will increase by different amounts to various levels in Oregon depending on the region of the state.

Politicians who raise taxes and/or impose increased regulatory burdens choose to ignore the simple economic reality that the more you tax or regulate something, the less of it you get. For good measure, when resources are drained from the private sector via taxes, they are used far less efficiently in government. That is, those dollars largely are wasted.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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