What’s one thing nearly every Californian buys on a regular basis? Gasoline! I just paid $3.15 per gallon to fill up my truck. I was running very low and due to the cap placed on my ATM card at the pumps I can’t even buy enough gas to fill my tank; it stops me at $75.00!
Now, if the state needed to raise its tax revenue without “seeming” to raise taxes how could it do that? Well, how about this? Raise the cost of gasoline and thus the percentage that goes to sales tax will increase.
How do you get Californians to pay $3.15 a gallon when the other states are paying as low as $2.44? Simple, charge them $4.25 for a short period of time then drop the price back down to your actual target $3.00 per gallon!
So why do you suppose we pay sales tax in the form of a percentage of the cost of the sale? Now you know!