tax

Beirut, Lebanon – Anger in Lebanon is growing after the government of Prime Minister Nawaf Salam announced increases in petrol taxes and value-added taxes (VATs) last week.

The rises in what economists and analysts have called “regressive” taxes led to two protests on February 17 and an array of criticism against the government, including from media and voices that had previously been friendly to Salam’s reformist administration.

“The government lost its mind,” Megaphone News, an independent, progressive news outlet published on a social media account in response to Salam’s government announcing a 300,000 Lebanese pound ($3.35) price increase on 20 litres (about 5.3 gallons) of petrol or gasoline and a one percent increase from 11 to 12 percent on VAT – a consumption tax charged on goods and services at each stage of production.

On the morning of February 17, a handful of taxi drivers blocked the Ring Bridge in downtown Beirut to protest the rise in taxes. Later that evening, in Riad al-Solh Square, around 50 or so protesters gathered to express their discontent with the government’s decision.

“You have no housing, you have no loans, you have no safety, I mean, you live here in a prison, brother,” one angry protester told Lebanese television station Al Jadeed from the Ring Bridge protest.

His comments represent the frustration felt by many Lebanese – that the tax increases are yet another indignity the population must live through, including near-daily Israeli attacks and violations of the 2024 ceasefire, collapsing buildings in the north, and an ongoing economic crisis since 2019.

Salam doubles down

The last time a tax spike sent Lebanese people to the streets was in 2019. Anger in Lebanon had boiled after decades of economic and political mismanagement by the government. Then, as the country’s economy started collapsing, the government tried to implement a series of taxes, including on WhatsApp calls.

The response was widespread protests that collapsed the government, led at the time by then-Prime Minister Saad al-Hariri. But they failed to dislodge the wider sectarian system that many activists and experts say plagues Lebanon and prevents reform.

Last week’s protests were on a far smaller scale than 2019, however.

Then, protesters forced the government to walk back the taxes. But Salam, the prime minister, defended the tax hike on Friday. The government’s argument is that the taxes are necessary to pay salaries and pensions for state employees and retirees.

“We had to find a quick source to fund the raises,” he said. “These are exceptional measures… but the government wants to reform the tax system, not just impose new taxes.”

Salam also said that his government inherited a “very difficult” financial situation and promised that he would rebuild trust between the state and the people by working to establish a fair tax system.

Lebanon’s Finance Minister Yassine Jaber said the fuel price increase would take effect immediately, but that VAT increases would need parliament’s approval.

“More than 50 per cent of the budget today is allocated to salaries, and it was necessary to take steps to secure the funds,” he said.

VAT is a regressive tax

But not everyone agreed with the decision, including some ministers themselves. The right-wing Lebanese Forces bloc – which is part of the government coalition – voiced objection to the tax increase, calling for a study of the impacts.

Analysts, meanwhile, were heavily critical of the tax increase. They said that the rise of petrol prices and VAT would punish the country’s most vulnerable and would further widen the gap between rich and poor in Lebanon.

“The people who are most affected by value-added taxes are usually the poorest of the poor and the most vulnerable, given the type of their consumption, which is mostly filled of the goods and the services that are affected by taxation, and whereby the proportion of the taxation is significant,” Farah al-Shami, senior fellow and programme director for Social Protection at the Arab Reform Initiative, told Al Jazeera. “VAT is by nature the most regressive type of taxation. Studies have shown that it affects the full supply chain, meaning everything that goes into the production, for example, of a certain good is affected.”

A price increase at every step of the supply chain means that prices compound to end up being more expensive for consumers.

In 2019, decades of government mismanagement of the economy ended in the collapse of the banking sector and the depreciation of the Lebanese pound by over 90 percent. Before 2019, $1 was equivalent to 1,500 Lebanese pounds, whereas now $1 is valued at nearly 89,500 Lebanese pounds.

Many lost their life savings with the currency freefall. Banks quickly shut their doors and limited withdrawals. More than six years later, many Lebanese have not recovered, nor has the economy.

Scandalous undertaxing

The high cost of living is a regular talking point among Lebanese, particularly in the capital, Beirut. Many are struggling to make ends meet and rely on the $5.8bn in remittances from family or contacts abroad (these are 2024 figures).

With so many struggling, a tax increase that impacts the entire population is a recipe for anger. And analysts said that if the government is in need of tax revenue, there are plenty of undertaxed sources to draw from.

“Property in Lebanon remains scandalously undertaxed,” Dania Arayssi, a senior analyst at New Lines Institute for Strategy and Policy Luxury, told Al Jazeera. “Real estate in Beirut — some of the most expensive per square metre in the region — generates a fraction of the public revenue it could and should. Capital gains on property are minimal. Wealth held in land and assets is effectively sheltered. Similarly, luxury goods face no meaningful additional burden.”

Fouad Debs, a lawyer and member of the Depositors Union, a group founded after the 2019 banking crisis to protect the rights of depositors, said the decision went against the government’s stated goals of reform.

“All of this is to keep the [current] system intact and save the banks, instead of having them also pay the taxes that they should pay,” Debs said.

TODAY Sun Travel is urging our readers to stand behind our campaign to Stop The Holiday Tax.

The Government is proposing to allow local authorities the right to tax overnight stays in holiday parks, campsites, cottages, B&Bs and hotels.

That could see the cost of some of the cheapest stays at our beloved holiday parks almost DOUBLE.

The new proposals, originally announced during the Budget, could mean a £2 tax per person per night on staycations.

That would mean £70 extra for a family of five taking a week-long break.

And that’s after you’ve paid 20 per cent VAT on your trip.

HOLS FARCE

Holiday tax is insane… it will be cheaper to go to Benidorm, blast B&B owners

ALLEN SIMPSON

Holidays are for relaxing, not taxing & Govt disaster plan threatens so much

Most families already pay higher prices because of increased demand for travel during the school holidays.

The proposals will mean that many of those who have the least will be forced to pay more for precious breaks, including the many thousands who enjoy our own Hols From £9.50 trips.

The move has been met with dismay by tourism bosses and travel businesses who fear British holidaymakers may just decide to head abroad instead — or not be able to afford a break at all.

The new taxes would also have an impact on those visiting the UK from abroad.

Research from the World Travel & Tourism Council has found at least £14billion could be lost from the UK economy if daily visitor taxes were introduced.

As an industry, travel and tourism supports 4.5million jobs in the UK, the WTTC said, equivalent to roughly one in eight jobs nationwide.

But their research found that 29 per cent of visitors from the US, France and Germany — the largest inbound tourist markets — would consider alternative destinations or just decide not to visit if a substantial tax is introduced.

The levy would hit tourism in seaside towns that are already struggling to attract visitors away from the lure of cheap foreign breaks.

Just last week, VisitEngland announced a £1million campaign to encourage holidaymakers to visit the UK’s north west coast.

How can taxing those very staycation tourists help boost visits to areas of the UK where they are already having trouble attracting holidaymakers?

To show your support for our campaign and to see just how it could impact you, go to our website at StopTheHolidayTax.uk.

Enter your name and postcode and it will automatically write a message to your MP on your behalf asking them to stop the holiday tax.

The site also has a handy calculator to show you just how much it could end up costing you if the new rules go ahead.

We must stop this hols tax madness

SUN Holiday fans Diane Hunter and Michael O’Brien are already packing their bags for their next bargain break – four nights at Parkdean Resorts Whitley Bay Holiday Park, Tyne & Wear, in two weeks’ time.

But the couple, who have been on more than 200 of our great getaways in the past 20 years, are furious at the Government’s proposed holiday tax.

Retired fork-lift truck driver Michael, 61, says: “It’s an absolute disgrace.

“Just a couple of weeks ago, coinciding with my birthday, I had a major operation to remove a stomach ulcer. This break is part of my recuperation.

“But the threat of this added tax has only added to my anxiety and just shows the present Labour administration does not care about ordinary folk.

“I’m never going to agree with this idea.”

Michael and retired office worker Diane, 57, already have an astonishing nine Sun Holidays booked this year.

The couple, of Grangemouth, near Falkirk, say the value-for-money breaks put the icing on the cake of their time together. Michael feels Labour is now clearly targeting hard-working families as well as the less well-off.

He says: “The amount involved might not seem a lot, but it could mean the difference between being able to afford a holiday or not.

“Labour is scraping the bottom of the barrel here.

“So, we have no hesitation in backing The Sun campaign.

“People have to stand up and fight to stop this madness.”

‘Lots of us will lose out on trips’

JACK CULLWICK went on his first holiday in eight years this week.

With his wife and two sons, aged eight and two, he was spending half-term at Beverley Holiday Park in Paignton, Devon.

Jack, 33, of Stratford-upon-Avon, Warks, runs his own transport business and can’t take holidays overseas because he needs to be close to work, even when he’s off.

He says: “The holiday tax is a terrible idea.

“There are so many people who can’t go abroad for a number of reasons, whether it’s to be nearby for family or because of their jobs or being on call.

“If we’re priced out of coming away in the UK, plenty of people won’t have a holiday at all.”

Populist Sen. Bernie Sanders on Wednesday formally kicked off the campaign to place a billionaires tax on the November ballot, framing the proposal as something larger than a debate about economic and tax policy as he appeared at a storied Los Angeles venue.

“The billionaire class no longer sees itself as part of American society. They see themselves as something separate and apart, like the oligarchs,” he told about 2,000 people at the Wiltern. The independent senator from Vermont compared them to kings, queens and czars of yore who believed they had a divine right to rule.

These billionaires “have created huge businesses with revolutionary technologies like AI and robotics that are literally transforming the face of the Earth,” he said, “and they are saying to you and to everybody in America, who the hell do you think you are telling us what we — the ruling elite, the millionaires, the billionaires, the richest people on Earth — who do you think you are telling us what we can do or not?”

California voters can show the billionaires “that we are still living in a democratic society where the people have some power,” Sanders said.

The senator is promoting a labor union’s proposal to impose a one-time 5% tax on the assets of California billionaires and trusts to backfill federal healthcare funding cuts by the Trump administration. Supporters of the contentious effort began gathering voter signatures to place the measure on the November ballot earlier this year. Sanders previously endorsed the proposal on social media and in public statements, and said he would seek to create a national version of the wealth tax.

But Wednesday’s event, a rally that lasted more than two hours and featured a lengthy performance by Rage Against the Machine guitarist Tom Morello, was framed as the formal launch of the campaign.

“Some people are free to choose between five-star restaurants, while others choose which dumpster will provide their next meal,” Morello said. “Some are free to choose between penthouse suites, while others are free to choose in which gutter to lay their heads.”

The guitarist’s comments came amid a set that included Rage’s protest song “Killing in the Name” and Bruce Springsteen’s social justice ballad “The Ghost of Tom Joad.”

“The people who’ve changed the world in progressive, radical or even revolutionary ways,” Morello said, “did not have any more money, power, courage, intelligence or creativity than anyone here tonight.”

Milling about outside the Wiltern, a historic Art Deco venue, were workers being paid $10 per signature they gathered to help qualify the proposal for the November ballot. Inside, attendees heard from labor leaders, healthcare workers and others whose lives are being affected by federal funding cuts to healthcare.

Lisandro Preza said he was speaking not only only as a leader of Unite Here Local 11, which represents more than 32,000 hospitality workers, but also as someone who has AIDS and recently lost his medical coverage.

“For me, this fight is very personal. Without my health coverage, the thought of going to the emergency room is terrifying,” he said. “That injection I rely on costs nearly $10,000 a month. That shot keeps my disease under control. Without it, my health, my life, are at risk, and I’m not alone. Millions of Americans are facing the same after massive federal healthcare cuts are putting our hospitals on the brink of collapse.”

Sanders, who punctuated his remarks with historic statistics about wealth in the United States and anecdotes about billionaires’ purchases of multiple yachts and planes, tied the impending healthcare cuts to broader problems of growing income and wealth inequality; the consolidation of corporate ownership, including over media outlets; the decline in workers’ wages despite increased productivity; and the threats to the job market of artificial intelligence and automation. He said all these issues were grounded in the greed of the nation’s wealthiest residents.

“For these people, enough is never enough,” he said. “They are dedicated to accumulating more and more wealth and power … no matter how many low-income and working-class people will die because they no longer have health insurance.”

“Shame! Shame!” the audience screamed.

In addition to the wealth tax event, Sanders also plans to use his time in California to meet with tech leaders and speak on Friday at Stanford University about the effects of artificial intelligence and automation on American workers alongside Rep. Ro Khanna (D-Fremont).

Millions of California voters deeply support the Vermont senator, who won the state’s 2020 Democratic presidential primary over Joe Biden by eight points, and narrowly lost the 2016 Democratic primary to Hillary Clinton.

Sanders were the first presidential candidate Elle Parker, 30, ever cast a ballot for in a presidential election.

“He’s inspired me,” said the podcaster, who lives in East Hollywood. “I just love the way he uses his words to inspire us all.”

Supporters proposed the wealth tax to make up for the massive federal funding cuts to healthcare that Trump signed last year. The California Budget & Policy Center estimates that as many as 3.4 million Californians could lose Medi-Cal coverage, rural hospitals could shutter, and other healthcare services would be slashed unless a new funding source is found.

But the tax proposal is controversial, creating a notable schism among the state’s Democrats because of concerns that it will prompt an exodus of the state’s wealthy, who are the major source of revenue that buttresses California’s volatile budget.

Gov. Gavin Newsom is among the Democrats who oppose it, as is San Jose Mayor Matt Mahan, who is among the dozen candidates running to replace the termed-out governor.

Mahan argued that the proposal had already hurt the state’s finances by driving economic investment and tax revenue out of California to tax-friendly environs.

“We need ideas that are sound, not just political proposals that sound good,” he said. “The answer is to close the federal tax loopholes the ultra-wealthy use to escape paying their fair share and invest those funds in paying down our debt, rebuilding our infrastructure, and protecting our most vulnerable families from skyrocketing healthcare premiums. The only winners in this proposal are the workers and taxpayers of Florida and Texas, who will take our jobs and benefit from the capital and tax revenue California is losing.”

A group affiliated with the governor plans to run digital ads opposing the proposal featuring Newsom along with other politicians on both sides of the aisle, as first reported by the New York Times.

The proposal has received more expected and unified backlash from the state’s conservatives and business leaders, who have launched ballot measures that could nullify part if not all of the proposed wealth tax. This is dependent on which, if any, of the measures qualify for the ballot — the number of votes each receives in November compared to the labor effort.

Silicon Valley billionaires, notably PayPal co-founder Peter Thiel and venture capitalist David Sacks — both major Trump supporters — announced they had already decamped California because of the effort.

Rob Lapsley, president of California Business Round Table, added that if the wealth tax is approved, it would destroy the state’s innovation economy, destabilize tax revenue and ultimately result in all Californians paying higher taxes.

“Let’s be clear — this $100-billion tax increase isn’t just a swipe at California’s most successful entrepreneurs; it’s a tax no one can afford because it weakens the entire economic ecosystem that supports jobs, investment, wages, and public services for everyday Californians,” he said. “When high earners leave, the cost doesn’t vanish — it lands on everyone through fewer jobs, less investment, and a weaker tax base — a recipe for new and higher taxes for everyone.”

WASHINGTON — As progressives seek to place a new tax on billionaires on California’s November ballot, a Republican congressman is moving in the opposite direction — proposing federal legislation that would block states from taxing the assets of former residents.

Rep. Kevin Kiley (R-Rocklin), who faces a tough re-election challenge under California’s redrawn congressional maps, says he will introduce the “Keep Jobs in California Act of 2026” on Friday. The measure would prohibit any state from levying taxes retroactively on individuals who no longer live there.

The proposed legislation adds another layer to what has already been a fiery debate over California’s approach to taxing the ultra-wealthy. It has created divisions among Democrats and has placed Los Angeles at the center of a broader political fight, with Bernie Sanders set to hold a rally on Wednesday night in support of the wealth tax.

Kiley said he drafted the bill in reaction to reports that several of California’s most prominent billionaires — including Meta Chief Executive Mark Zuckerberg and Google co-founders Larry Page and Sergey Brin — are planning to leave the state in anticipation of the wealth tax being enacted.

“California’s proposed wealth tax is an unprecedented attempt to chase down people who have already left as a result of the state’s poor policies,” Kiley said in a statement Wednesday. “Many of our state’s leading job creators are leaving preemptively.”

Kiley said it would be “fundamentally unfair” to retroactively impose taxes on former residents.

“California already has the highest income tax of any state in the country, the highest gas tax, the highest overall tax burden,” Kiley said in a House floor speech earlier this month. “But a wealth tax is something unique because a wealth tax is not merely the taxation of earned income, it is the confiscation of assets.”

The fate of Kiley’s proposal is just as uncertain as his future in Congress. His 5th Congressional District, which hugs the Nevada border, has been sliced up into six districts under California’s voter-approved Proposition 50, and he has not yet picked one to run in for re-election.

The Billionaire Tax Act, which backers are pushing to get on the November ballot, would charge California’s 200-plus billionaires a onetime 5% tax on their net worth in order to backfill billions of dollars in Republican-led cuts to federal healthcare funding for middle-class and low-income residents. It is being proposed by the Service Employees International Union-United Healthcare Workers West.

In his floor speech, Kiley worried that the tax, if approved, could cause the state’s economy to collapse.

“What’s especially threatening about this is that our state’s tax structure is essentially a house of cards,” Kiley said. “You have a system that is incredibly volatile, where top 1% of earners account for 50% of the tax revenue.”

But supporters of the wealth tax argue the measure is one of the few ways that can help the state seek new revenue as it faces economic uncertainty.

Sanders, an independent from Vermont who caucuses with the Democrats, is urging Californians to back the measure, which he says would “provide the necessary funding to prevent more than 3 million working-class Californians from losing the healthcare they currently have — and would help prevent the closures of California hospitals and emergency rooms.”

“It should be common sense that the billionaires pay just slightly more so that entire communities can preserve access to life-saving medical care,” Sanders said in a statement earlier this month. “Our country needs access to hospitals and emergency rooms, not more tax breaks for billionaires.”

Other Democrats are not so sure.

Gov. Gavin Newsom, who is eyeing a presidential bid in 2028, has opposed the measure. He has warned a state-by-state approach to taxing the wealthy could stifle innovation and entrepreneurship.

Some of he wealthiest people in the world are also taking steps to defeat the measure.

Brin is donating $20 million to a California political drive to prevent the wealth tax from becoming law, according to a disclosure reviewed by the New York Times. Peter Thiel, the co-founder of PayPal and the chairman of Palantir, has also donated millions to a committee working to defeat the proposed measure, the New York Times reported.

In his first five years as California’s lieutenant governor, Gavin Newsom made more than $4 million from his wineries, restaurants, hotels and other hospitality businesses.

And that’s on top of his government salary, which is $142,577 a year.

The former mayor of San Francisco is the first candidate in the 2018 race for governor to release his state and federal tax returns. He filed jointly with his wife, the actress and filmmaker Jennifer Siebel Newsom. On Monday, Newsom allowed reporters to review — but not photocopy — six years of the couple’s returns, from 2010 to 2015, at the San Francisco offices of his campaign consultants, SCN Strategies.

Newsom, the early front-runner in the June 2018 primary, cites his business expertise as a key credential in his campaign for governor. With the help of the wealthy Getty family, he opened a San Francisco wine store in 1992, expanding it over the last 25 years into a network of nearly two dozen businesses known as PlumpJack Group. They include Napa Valley wineries, hotels in Lake Tahoe and Palm Springs, and bars and restaurants in San Francisco.

Here’s what you should know about the tax documents:

The Newsoms reported an average of $1.4 million in income from 2010 to 2015

The Newsoms’ tax returns provided a window into a complex web of the family’s financial interests throughout California. The couple’s lowest adjusted gross income since 2011 was $1.37 million in 2013.

The Newsoms’ average income and tax bills in the years 2010-2015 were:

• Adjusted gross income: $1.4 million.
• Federal tax rate: 26.4%.
• Rate of charitable giving compared to income: 6.8%.
• Federal taxes paid: $384,687.
• State taxes paid: $139,146.

PlumpJack Group was founded by Lt. Gov. Gavin Newsom as PlumpJack Wine in 1992. Newsom is still a partner in the company, which has expanded to include restaurants, bars and resorts in addition to three wineries and two wine shops, including this store in San Francisco. (Phil Willon/Los Angeles Times)

(Phil Willon/Los Angeles Times)

2015 was a good year for the Newsoms

The couple, who now live in Marin County, reported an adjusted gross income of $1,720,383 in 2015, the highest amount they earned in the past six years. The Newsoms’ total tax bill came to $753,866, with $568,333 going to the Internal Revenue Service and $185,533 to the California treasury. They donated $62,973 to charity, including a $1,000 contribution to the Bay Area Discovery Museum.

The Newsoms’ biggest income source came from Airelle Wines Inc., which runs Napa wineries, at roughly $790,000.

They made hundreds of thousands of dollars selling silver bars — and donated more than $100,000 to charities each year

• The tax returns show the Newsoms made hundreds of thousands of dollars trading silver bars during Newsom’s tenure as lieutenant governor. In 2011 alone, they turned a profit of $499,452 on the sale of silver bars.

• Newsom’s 2013 book, “Citizenville,” appeared to be a moderate money-maker. From 2011 to 2015, Newsom reported a total of $370,325 in income as an author and by working in media. A spokesman for the lieutenant governor said he was unsure if some of that total included money Newsom was paid for his former talk show on Current TV, “The Gavin Newsom Show,” which aired in 2012 and 2013.

• The Newsoms reported an average of $102,212 in charitable donations each year — nearly 7 percent of their income. But apart from clothing and toy donations to the Salvation Army and Goodwill, it was unclear which charities received money from the couple. Because the Newsoms hold interests in a wide network of partnerships, corporations and trusts, and most of their charitable donations were channeled through them, it is unclear which organizations received the money. A spokesman for Newsom’s political campaign said some of the charities the couple donated money to included the Law Center to Prevent Gun Violence, Best Buddies and Planned Parenthood LA.

Newsom owns a Tesla, and received tax credit for it

Over the years, the Newsoms have received a few tax breaks for their rapidly growing, environmentally conscious family.

• Newsom received a $7,500 “Alternative Motor Vehicle Credit” on his 2012 taxes after buying a Tesla Model S.
• He received a $500 tax credit in 2012 for installing energy-efficient doors, windows and insulation.
• In 2010, the Newsoms’ daughter Montana was their only dependent. Then came their son Hunter in 2011. Daughter Brooklynn arrived in 2013. The Newsoms’ fourth child, Dutch, will make his grand entrance on the 2016 return.

Releasing his taxes ratchets up the pressure on his rivals to do the same

Newsom’s release of his tax returns puts pressure on his rivals to make theirs public too. The move could be a sign that the lieutenant governor is banking on revelations that he thinks could be useful to his campaign, such as information detailing Antonio Villaraigosa’s income sources in the years since he left office as mayor of Los Angeles.

Villaraigosa and Newsom’s other chief rival, state Treasurer John Chiang, have agreed to make public their tax returns, but have not yet specified when they will do so. Another candidate, Delaine Eastin, a former superintendent of public instruction, has also vowed to release her tax returns.

A spokesman for the leading Republican in the race, venture capitalist John Cox, said it was too early to say whether he would make his tax returns public.

phil.willon@latimes.com

Twitter: @philwillon

michael.finnegan@latimes.com

Twitter: @finneganLAT

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It’s one thing most everyone agrees on: federal funding cuts have left the Los Angeles County health system teetering toward financial collapse.

But the supervisors’ chosen antidote — a half-cent sales tax to replenish county coffers — is being condemned by a slew of cities as its own form of financial catastrophe.

“I heard from every city in my district,” said Kathryn Barger, the only supervisor who voted against putting the sales tax on the June ballot.

The resounding reaction? “Absolutely not,” she says.

“People are fatigued,” Barger said. “I’m not convinced that it’s going to pass.”

Observers wouldn’t have sensed that fatigue from the rowdy crowd of supporters that filled the board meeting Tuesday, along with seldom-used overflow rooms. The supervisors voted 4-1 at the meeting to put the tax on the ballot.

“There really are no other viable and timely options,” said Supervisor Holly Mitchell, who introduced the measure along with Supervisor Hilda Solis. “Trust me, I looked high and low.”

The goal, supervisors say, is to generate $1 billion per year to backfill the dwindling budgets of local hospitals and clinics battered by federal funding cuts.

The county’s already bracing for impact. The Department of Public Health announced Friday it would shutter seven clinics. Officials say it’s just the beginning, with the county poised to lose more than $2 billion in funding for health services over the next three years. Hospitals could be down the road, they warn.

But many cities, some of which could have local sales tax hit more than 11%, are revolting on the plan.

“I have been getting calls and texts and letters like honestly I have not gotten in a long time,” Supervisor Janice Hahn told the audience as a message from Jeff Wood — the vice mayor of Lakewood — pinged on her phone. “They are really diving in on this one.”

In a series of opposition letters, the cities unleashed a torrent of criticism. Norwalk called the tax “rushed.” Palmdale said it had “significant flaws.” Glendale found it “deeply troubling and fundamentally unfair.”

Some bristled at the cost to consumers. Palmdale and Lancaster — some of the poorest cities in the county — could wind up with some of the highest sales tax rates in the state if the measure passes.

Some cities say the bigger issue is they don’t trust the county. They point to its checkered history of pushing ballot measures that don’t live up to their promises.

Measure B, a special parcel tax, was passed in 2002 to fund the county’s trauma center network. An audit more than a decade later found the county couldn’t prove it used the money for emergency medical services.

Measure H, the homelessness services tax measure, was passed in 2017 as a temporary tax. Voters agreed in 2024 to make the tax permanent and to double the rate — though some cities insist they’ve never gotten their fair share of the funds.

“It’s a historical issue,” said Glendora mayor David Fredendall, whose city opposes the sales tax. “We don’t trust it.”

The county decided to put the sales tax on the ballot as a general tax, meaning the money goes into the general fund. Legally, supervisors could use the money for whatever services they desire.

“They say ‘No, this is our plan’, but we’re going to expand from five to nine supervisors over the next few years before this tax expires,” said Marcel Rodarte, the head of the California Contract Cities Assn., a coalition of cities inside the county. “They may say we need to use these funds for something else.”

A general tax also is easier to pass, since it needs only a majority vote. Special taxes — levies earmarked for a specific purpose — need two-thirds of the vote.

The measure also asks voters to approve the creation of an oversight group that would monitor where the money goes. The supervisors also voted on a spending plan for the tax money, which would dedicate the largest portion of funds for uninsured residents over the next five years.

Some opponents predict the tax will stick around longer than advertised.

“A temporary tax is like Bigfoot,” said Jon Coupal, president of the Howard Jarvis Taxpayers Assn., a group that advocates for lower taxes. “It exists in fantasy.”

State of play

— FRIENDLY FIRE: Three hours before the filing deadline, L.A. City Councilmember Nithya Raman jumped into the race for mayor, challenging her former ally Karen Bass. Her candidacy will be Bass’ most serious threat.

— DEFUND DETOUR: Shortly after, Raman staked out her position on cops, saying she doesn’t want the LAPD to lose more police. Raman called for department downsizing when she first ran for city council in 2020.

— LOYAL LABOR: The head of the AFL-CIO, the county’s powerful labor federation, blasted Raman as an “opportunist.” Federation president Yvonne Wheeler said her organization will “use every tool” at its disposal to get Bass reelected.

— PETITION PUSH: Scores of candidates for L.A. city offices picked up their petitions Feb. 7, launching their effort to collect the signatures they need to qualify for the ballot. The first to turn in a petition was Councilmember Traci Park, who is facing two challengers while running for reelection in a coastal district.

— EYES ON ICE: Los Angeles police officers must turn on their body cameras if they’re at the scene of federal immigration enforcement operations, according to a new executive directive issued by Bass. LAPD officers also must document the name and badge number of the agents’ on-scene supervisor.

— CONTESTING CLEANUPS: A federal judge ruled this week that the city of L.A. violated the constitutional rights of homeless people by seizing and destroying their personal property during encampment cleanups. Lawyers for the plaintiffs want U.S. District Judge Dale S. Fischer to issue an injunction requiring the city to give homeless people the opportunity to contest the seizure of their property.

— HOTEL HIKE: Voters in the June 2 election will be asked to hike the city’s tax on nightly hotel stays — increasing it to 16% from 14% — for the next three years. The tax would then drop to 15% in 2029.

— PAYDAY POLITICS: The county is considering a proposal that would remove supervisors’ final decision-making power in contract disputes involving sheriff’s deputies and firefighters. Supporters say it’ll take politics out of labor negotiations while opponents warn of bloated labor costs.

QUICK HITS

• Where is Inside Safe? The mayor’s signature homelessness program went to Los Angeles City Council District 13, bringing 50 unhoused Angelenos indoors from an encampment.
• On the docket next week: The county’s back to its marathon budget briefings. Tune in Tuesday for presentations from the sheriff, district attorney and probation department.

Stay in touch

That’s it for this week! Send your questions, comments and gossip to LAontheRecord@latimes.com. Did a friend forward you this email? Sign up here to get it in your inbox every Saturday morning.

The nonpartisan Congressional Budget Office’s 10-year outlook projects worsening long-term United States federal deficits and rising debt, driven largely by increased spending, notably on Social Security, Medicare, and debt service payments.

Compared with the CBO’s analysis this time last year, the fiscal outlook, which was released on Wednesday, has deteriorated modestly.

The CBO said that the deficit for fiscal 2026 – President Donald Trump’s first full fiscal year in office – will be about 5.8 percent of GDP, about where it was in fiscal 2025, when the deficit was $1.775 trillion.

But the US deficit-to-GDP ratio will average 6.1 percent over the next decade, reaching 6.7 percent in fiscal 2036 – far above US Treasury Secretary Scott Bessent’s goal to shrink it to about 3 percent of economic output.

Major developments over the last year are factored into the latest report, including Republicans’ tax and spending measure known as the “One Big Beautiful Bill Act,” higher tariffs, and the Trump administration’s crackdown on immigration, which includes deporting millions of immigrants from the US mainland.

As a result of these changes, the projected 2026 deficit is about $100bn higher, and total deficits from 2026 to 2035 are $1.4 trillion larger, while debt held by the public is projected to rise from 101 percent of GDP to 120 percent — exceeding historical highs.

Notably, the CBO says higher tariffs partially offset some of those increases by raising federal revenue by $3 trillion, but that also comes with higher inflation from 2026 to 2029.

Rising debt and debt service are important because repaying investors for borrowed money crowds out government spending on basic needs such as roads, infrastructure and education, which enable investments in future economic growth.

CBO projections also indicate that inflation does not hit the Federal Reserve’s 2 percent target rate until 2030.

A major difference is that the CBO forecasts rely on significantly lower economic growth projections than the Trump administration, pegging 2026 real GDP growth at 2.2 percent on a fourth-quarter comparison basis, fading to an average of about 1.8 percent for the rest of the decade.

Trump administration officials in recent weeks have projected robust growth in the 3-4 percent range for 2026, with recent predictions that first-quarter growth could top 6 percent amid rising investments in factories and artificial intelligence data centres.

CBO’s forecasts assume that tax and spending laws and tariff policies in early December remain in place for a decade. The government’s fiscal year starts on October 1.

While revived investment tax incentives and bigger individual tax refunds provide a boost in 2026, the CBO said that this is attenuated by the drag from larger fiscal deficits and reduced immigration that slows the growth of the labour force.

Jonathan Burks, executive vice president of economic and health policy at the Bipartisan Policy Center said “large deficits are unprecedented for a growing, peacetime economy”, though “the good news is there is still time for policymakers to correct course.”

‘Urgent warning’

Lawmakers have recently addressed rising federal debt and deficits primarily through targeted spending caps and debt limit suspensions, as well as deploying “extraordinary measures” when the US is close to hitting its statutory spending limit, though these measures have often been accompanied by new, large-scale spending or tax policies that maintain high deficit levels.

And Trump, at the start of his second term, deployed a new “Department of Government Efficiency”, which set a goal to balance the budget by cutting $2 trillion in waste, fraud and abuse; however, budget analysts estimate that DOGE cut anywhere between $1.4bn to $7bn, largely through workforce firings.

Michael Peterson, CEO of the Peterson Foundation, said the CBO’s latest budget projection “is an urgent warning to our leaders about America’s costly fiscal path.”

“This election year, voters understand the connection between rising debt and their personal economic condition. And the financial markets are watching. Stabilising our debt is an essential part of improving affordability, and must be a core component of the 2026 campaign conversation.”

L.A. County voters will be asked this June to hike the sales tax rate by a half-cent to soften the blow of federal funding cuts on the region’s public health system.

The county Board of Supervisors voted 4 to 1 Tuesday to put the sales tax on the ballot. County officials estimate it would generate $1 billion per year to replenish the shrinking budgets of local hospitals and clinics. The tax, if approved by voters this summer, would last for five years.

The supervisors say the increased tax — a half-cent of every dollar spent — would offset major funding cuts in the One Big Beautiful Bill Act, which is expected to slash more than $2 billion from the county’s budget for health services over the next three years.

“Millions of people look to us to step up even when the federal government has walked away,” said Supervisor Holly Mitchell, who introduced the ballot proposal along with Supervisor Hilda Solis.

The tax was pushed by Restore Healthcare for Angelenos, a coalition of healthcare workers and advocates, who argue it is necessary to ward off mass layoffs of healthcare workers and keep emergency rooms open.

Mitchell said she was trying to make sure supervisors learned their lesson from the closure of Martin Luther King Jr./Drew Medical Center in 2007, which ripped a gaping hole in the health system for South L.A. residents who had to travel farther to more crowded emergency rooms.

“People died as a result of that,” she said. “I don’t want to go back there.”

Supervisor Kathryn Barger cast the lone no vote, saying she believed the county should look to the state for help rather than taxpayers. She also said she was concerned the tax money was not earmarked for healthcare costs but rather would go into the general fund, giving officials more discretion over how it gets spent.

“We are not, as a whole, credible when it comes to promises made, promises broken,” she said.

Members of the audience hold up signs inside the county Hall of Administration, where supervisors discussed how to replenish more than $2 billion in federal funding cuts to the county healthcare system.

(Myung J. Chun / Los Angeles Times)

As part of the tax hike, voters would be asked to also approve the creation of an oversight group to monitor how the money is spent. The supervisors also voted on a spending plan for the money, which would have the largest chunk of funds go to care for uninsured residents.

Los Angeles County currently has a sales tax of 9.75% with cities adding their own sales tax on top. If the healthcare hike passes this summer, the sales tax would be more than 11% in some cities. Palmdale and Lancaster, some of the poorest parts of the county, would potentially have the highest sales tax of 11.75%.

County public health officials painted a grim picture of what life looks like for the poorest and sickest residents if new money doesn’t flow into the system. Emergency rooms could be shuttered, they warned. Contact tracing and the daily testing of ocean water quality could slow down. Tens of thousands of health workers could lose their jobs, they said.

“The threat is real already,” said Barbara Ferrer, the head of the county Department of Public Health.

Some on Tuesday condemned the measure as well-intentioned but ill-formulated. The California Contract Cities Assn., a coalition of cities inside Los Angeles County, argued a larger sales tax would “disproportionately burden the very residents the County seeks to protect.”

“My phone has been blowing up,” said Janice Hahn, one of two supervisors who said the Citadel Outlets, a large shopping mall in City of Commerce, called to say they were worried shoppers were going to start crossing county lines.

With the effects of the federal cuts expected to be felt across the state, other California counties have already started to look to consumers to replenish government coffers. Last November, Santa Clara County voters approved a similar sales tax measure to raise money for the public health system.

Sen. Bernie Sanders, a political hero among liberals and populists, next week will formally kick off the campaign to place a new tax on billionaires on California’s November ballot.

The controversial proposal, which would impose a one-time 5% tax on the assets of the state’s wealthiest residents, is critical to backfilling federal funding cuts to healthcare enacted by the Trump administration, Sanders said in a statement.

“This initiative would provide the necessary funding to prevent over 3 million working-class Californians from losing the healthcare they currently have — and would help prevent the closures of California hospitals and emergency rooms,” he said. “It should be common sense that the billionaires pay just slightly more so that entire communities can preserve access to life-saving medical care. Our country needs access to hospitals and emergency rooms, not more tax breaks for billionaires.”

The independent senator from Vermont, who caucuses with Democrats in the nation’s Capitol, will appear Feb. 18 at the Wiltern in Los Angeles alongside prominent musical acts. Sanders has a deep base of support among California Democrats, winning the state’s 2020 presidential primary over Joe Biden by eight points, and narrowly losing the 2016 primary to Hillary Clinton. In both elections, he won the votes of more than 2 million Californians, who were also a major source of the small-dollar donations that fueled his insurgent campaigns.

The tax proposal, which Sanders previously endorsed on social media, is proposed by the Service Employees International Union-United Healthcare Workers West. The supporters need to gather the signatures of nearly 875,000 registered voters and submit them to county elections officials by June 24 for the measure to qualify for the November ballot. They began gathering signatures in January.

Supporters of the tax argue it is one of the few ways the state can backfill major federal cuts to healthcare services for California’s most vulnerable residents. Opponents warn it would kill the innovation that has made the state rich and prompt an exodus of wealthy entrepreneurs.

More than 200 billionaires in Californians would be affected if the proposal qualifies for the ballot and is approved. Some prominent billionaires have already left the state, notably PayPal co-founder Peter Thiel and venture capitalist David Sacks.

Both men were major supporters of President Trump.

Democrats are divided about the issue. Notably, Gov. Gavin Newsom and San Jose Mayor Matt Mahan, who is among a dozen candidates running in November to replace the termed-out governor, oppose the proposal.

LDP looks set to secure 316 seats in Japan’s 500-member house, marking its best result since its founding in 1955.

Japan’s Prime Minister Sanae Takaichi has promised to cut taxes and keep her cabinet intact as she celebrated her Liberal Democratic Party’s (LDP) landslide victory in Sunday’s general election.

Takaichi’s pledge on Monday came as projections by the NHK broadcaster showed the conservative LDP securing 316 seats in the 500-member National Assembly and winning a “historic” two-thirds majority in the lower house.

The results marked the best result for the LDP since its founding in 1955, surpassing the previous record of 300 seats won in 1986 under then-Prime Minister Yasuhiro Nakasone.

LDP’s junior partner Japan Innovation Party won 36 seats, while the main opposition Centrist Reform Alliance managed to keep only 49 of the 172 seats it previously held.

Analysts credited the LDP’s triumph to the extraordinary popularity of Takaichi, who is Japan’s first female leader, and say it will allow her to pursue significant changes in Japan’s security, immigration and economic policies.

In a televised interview with NHK on Monday, Takaichi said she will emphasise policies meant to make Japan strong and prosperous.

She told NHK that she will push for the reduction of consumption taxes as promised by the LDP. During the campaign, the governing party had said it would ease household living costs by suspending the 8 percent food sales tax for two years.

“Most parties are in favour of reducing the consumption tax, such as reducing the tax on food items to zero, or to 5 percent, or reducing the tax on all items to 5 percent,” Takaichi said.

“The LDP has also campaigned for a consumption tax cut. I strongly want to call for the establishment of a supra-party forum to speed up discussion on this, as it is a big issue.”

Takaichi also indicated that she will not make any changes in her cabinet, calling it a “good team”.

The head of Japan’s top business lobby, Keidanren, also welcomed the result, saying it will help in restoring political stability.

“Japan’s economy is now at a critical juncture for achieving sustainable and strong growth,” Yoshinobu Tsutsui said.

United States President Donald Trump, who endorsed Takaichi ahead of the election, congratulated Takaichi in a post on social media and wished her “Great Success”.

South Korea’s President Lee Jae Myung also offered his congratulations and said he hoped to see her soon in Seoul.

The leaders of India, Italy and Taiwan also welcomed Takaichi’s win.

Al Jazeera’s Patrick Fok, reporting from Tokyo, said the message from Taiwan’s President William Lai Ching-te to Takaichi could upset China.

“Remember that Takaichi triggered Chinese anger after suggesting that Japan might intervene in the event of a Chinese attack on Taiwan,” he said, referring to the diplomatic storm the Japanese leader set off last year shortly after taking office.

“How she handles that relationship between Tokyo and Beijing is likely to define Japan’s foreign policy,” Fok added.

China regards Taiwan as part of its territory and has been keeping a close eye on Takaichi and the results of the polls.

The strong mandate for Takaichi could also accelerate her plans to bolster military defence, which Beijing has cast as an attempt to revive Japan’s militaristic past.

“Beijing will not welcome Takaichi’s victory,” said David Boling, principal at the Asia Group, a firm that advises companies on geopolitical risk.

“China now faces the reality that she is firmly in place – and that its efforts to isolate her completely failed,” Boling told the Reuters news agency.

SAN FRANCISCO — As California struggles with homelessness and healthcare cuts, some activists are taking on an unexpected cause: fighting for billionaires.

About a dozen people took part in the “March for Billionaires” on Saturday morning in San Francisco to raise awareness about the plight of the ultrarich. Although some assumed the event was satire, organizer Derik Kauffman said it was a sincere protest against a potential new tax on the state’s wealthiest residents.

“We must not judge billionaires as a class but by their individual merits,” he said, speaking outside the San Francisco Civic Center. “There are good billionaires and bad billionaires, just like there are good people and bad people. California is extraordinarily lucky that this is where people come to start companies and build fortunes and we should do our best to keep it that way.”

The Billionaire Tax Act is a proposed state ballot initiative that would levy a one-time, 5% tax on the state’s billionaires to help offset recent federal cuts that have affected healthcare and food-assistance programs. The tax would apply to their overall net worth but would exclude pensions, real estate and retirement accounts.

Supporters say it would benefit the majority of the state’s residents and help ensure billionaires pay their fair share. Opponents — including Gov. Gavin Newsom — argue it will cause billionaires and the businesses they own to flee the state, taking jobs and tax dollars with them.

Kauffman echoed those concerns Saturday and said everyone should want billionaires to remain in California.

“This tax will drive billionaires out; it already has,” he said. “The founders of Google — they left the state and they are taking their money with them.”

Google is still headquartered in California, but other companies tied to Google co-founders Larry Page and Sergey Brin recently lef the state, including T-Rex Holdings, which moved from Palo Alto to Reno last year.

San Francisco Jan. 7, 2026 Two counter-protesters mockingly impersonated billionaires by playing characters they dubbed “Oli Garch” and “Trilly O’Naire.”

(Katie King / Los Angeles Times)

The event attracted a few dozen humorous counterprotesters.

Razelle Swimmer carried around a puppet of the Swedish Chef from the Muppets, brandishing knives and wearing an apron that said “Eat the Rich.” Swimmer told The Times she doesn’t believe billionaires need more protections.

“If they aren’t willing to pay more taxes, then I don’t really care if they leave,” she said.

Other counterprotesters mockingly impersonated billionaires by donning crowns or top hats. A man and woman, playing characters called Oli Garch and Trilly O’Naire, said they worried what would happen if the tax passed.

“There is a small chance that my helicopter won’t be able to have a sauna in it just because apparently some kids want dental work or something,” said the woman, as she adjusted her tiara.

At one point, a man wearing a gold crown and carrying a sign that said “Let them eat cake” ran through the crowd shouting, “Keep the poors away from me.”

The Service Employees International Union-United Healthcare Workers West, the main backer of the tax proposal, needs to collect about 875,000 signatures by June 24 in order to get the measure on the November ballot.

The Legislative Analyst’s Office, which offers guidance to the Legislature about budgetary issues, has cautioned that the tax might lead to only short-term benefits.

“It is likely that some billionaires decide to leave California,” the agency stated in a recent analysis. “The income taxes they currently pay to the state would go away with their departure. The reduction in state revenues from these kinds of responses could be hundreds of millions of dollars or more per year.”

California has roughly 200 billionaires, the most of any state. Their collective wealth was $2.2 trillion in October, up from $300 billion in 2011, according to a December report from law and economics professors at UC Berkeley, UC Davis and the University of Missouri.

The researchers concluded that billionaires in the United States pay less in taxes, relative to income, than the average American.

“It is estimated that, including all taxes at all levels of government, billionaires paid only 24% of their true economic income in taxes in years 2018-20 while the U.S.-wide average was 30%,” the report states.

SAN FRANCISCO — Gov. Gavin Newsom, barred from running for reelection, still took heat Tuesday during the first debate in California’s 2026 race for governor.

Six Democrats and one Republican on the stage in Newsom’s hometown of San Francisco took direct aim at the governor’s record on homelessness, efforts to ban the sale of new gas-powered cars and opposition to an anti-crime ballot measure that Californians overwhelmingly passed two years ago.

Former Los Angeles Mayor Antonio Villaraigosa, who unsuccessfully ran against Newsom for governor in 2018, pointed to state spending on homelessness as an example of ineptitude.

“We spent $24 billion at the state, along with billions more from the counties and the cities throughout the state, and homelessness went on,” he said. “We cannot be afraid to look in the mirror.”

The televised debate revealed the schism between the moderate and progressive Democrats hoping to replace Newsom, as well as efforts by Steve Hilton, the sole Republican who took part, to coalesce the conservative vote.

Hilton, a former Fox New commentator and British political strategist, called on his top GOP rival, Riverside County Sheriff Chad Bianco, to drop out of the race.

“My Republican colleague Chad Bianco is not here tonight to face these Democrats or his record in 2020, during the Black Lives Matter riots,” Hilton said at the event, which was co-sponsored by the nonprofit Black Action Alliance, which was founded to give Black voters a greater voice in the Bay Area.

Bianco “took a knee when told to by BLM, now he says he was praying,” Hilton said. “Chad Bianco has got more baggage than LAX.”

Bianco was invited to the debate but said he was unable to attend because of a scheduling conflict. His campaign did not respond to requests for comment about Hilton’s attacks.

The, at times, feisty debate came amid a gubernatorial race that thus far has lacked sizzle or a candidate on either side of the aisle who has excited Californians. Public opinion polls show that most voters remain undecided.

Seven of the dozen prominent candidates running to replace Newsom participated in the gathering at the Ruth Williams Opera House in front of a live audience of about 200 people. Rep. Eric Swalwell (D-Dublin) was scheduled to participate but canceled, citing the need to go back to Washington, D.C., for congressional votes. Former Rep. Katie Porter (D-Irvine) also did not attend the debate.

The two-hour clash, at times plagued by audio issues, was hosted by two local Fox News affiliates and moderated by KTVU political reporter Greg Lee and anchor André Senior, as well as KTTV’s Marla Tellez.

Five takeaways from the debate:

Making California affordable again

When grilled about how they planned to tackle the high cost of living in the state — gas prices, rent, utility bills and other day-to-day financial challenges — most of the candidates prefaced their answers by talking about growing up in struggling households, often with immigrant parents who worked blue-collar jobs.

Former U.S. Health and Human Services Secretary Xavier Becerra said he would stabilize rents and freeze utility and home insurance costs “until we find out why they’re increasing.” California Supt. of Public Instruction Tony Thurmond said he would raise taxes on billionaires and create tax credits to help families afford the high cost of living.

Villaraigosa and Hilton said they would lower gas prices by cutting regulations on California’s oil refineries.

Hilton blamed the state’s high cost of living squarely on Democratic policies. “They’ve been in power for 16 years,” he said. “Who else is there to blame?”

Billionaire hedge fund founder turned climate activist Tom Steyer said he favors rent control. Steyer and former state Controller Betty Yee said they would prioritize zoning and permitting reform to build more housing, particularly near public transit. Both Steyer, a progressive, and San Jose Mayor Matt Mahan, a moderate, spoke about using new technology such as pre-fabricated homes to build more affordable housing.

Protecting immigrants

In the wake of the Trump administration’s chaotic immigration raids that started in Los Angeles in June and have spread across the nation — recently resulting in the shooting deaths of two people by federal agents in Minneapolis — the Democrats on stage unanimously voiced support for immigrants who live in California. Some pledged that, if elected, they would use the governor’s office to aggressively push back on President Trump’s immigration policies.

“We’ve got to say no to ICE, and we’ve got to take on Trump wherever he raises his ugly head,” Villaraigosa said.

Steyer, whose hedge fund invested in a company that runs migrant detention centers on the U.S.-Mexico border, and Thurmond both said they support abolishing Immigration and Customs Enforcement, and Thurmond and Mahan said they support a pathway to citizenship for undocumented immigrants.

Politicians politicking

Antonio Villaraigosa, left, talks to Betty Yee during the California gubernatorial candidate debate Tuesday in San Francisco.

(Laure Andrillon / Associated Press)

Amid the debate’s dodging, weaving, yammering and spicy back-and-forth, there were a few moments when the candidates rose above the din.

Villaraigosa, the former two-term mayor of Los Angeles and a former speaker of the California Assembly, insisted that the moderators call him “Antonio” instead of Mayor Villaraigosa.

“It’s my name, everybody. I’m just a regular guy,” he said, prompting a laugh.

Mahan, on the other hand, tried mightily to portray himself as being above the dirty business of politics.

“The truth is that our politics has been oversimplified,” he said. “It’s become this blood sport between populists on both sides, and you deserve real answers, not the easy answers.”

Yee, who has been running on her background as controller and a member of the California Board of Equalization, cast herself as the financial savior the state needs in trying economic times of budget deficits and federal cuts.

“We have not been accountable or transparent with our dollars for a long time,” she said. “Why are we right now and [in successive] years spending more than we’re bringing in? This is where we are. So accountability has to be a tone set from the top.”

The rich guy and the new guy

Steyer, who paints himself as a repentant billionaire devoted to giving away his riches to make California a better place for all, did not directly answer a question about his position on a controversial proposed ballot measure for a new tax on billionaires to fund healthcare. But he said he supported increasing taxes on the wealthy and boasted of having the political backing of bus drivers, nurses and cafeteria workers because he was the rich guy willing to “take on the billionaires for working families.”

Mahan, the latest major candidate to enter the race, wasn’t impressed.

“Tom, I’ve got about 3 billion reasons not to trust your answer on that,” he said, an apparent reference to Steyer’s net worth.

Although he supports closing tax loopholes for the wealthy, Mahan said he opposes the billionaire tax because “it will send good, high-paying jobs out of our state, and hard-working families, in the long run, will all pay more taxes for it.”

Money also spoke Tuesday

Although the battle over campaign fundraising didn’t overtly arise during Tuesday’s debate aside from Mahan’s comment about Steyer, it still was getting a lot of attention. Campaign fundraising disclosures became public Monday and Tuesday.

Unsurprisingly, Steyer led the pack with $28.9 million in contributions in 2025, nearly all of it donations that the billionaire spent on his campaign. Other top fundraisers were Porter, who raised $6.1 million; Hilton, who collected $5.7 million; Becerra, who banked $5.2 million; Bianco, who received $3.7 million in contributions; Swalwell’s $3.1 million since entering the race late last year; and Villaraigosa’s $3.2 million, according to documents filed with the California secretary of state’s office.

Mahan, who recently entered the race, wasn’t required to file a campaign fundraising disclosure, though he is expected to have notable support from wealthy Silicon Valley tech honchos. Former state Controller Betty Yee and state schools chief Tony Thurmond were among the candidates who raised the least, which spurs questions about their viability in a state of more than 23 million registered voters with some of the most expensive media markets in the nation.

Yee defended her candidacy by pointing to her experience.

“All the polls show that this race is wide open. You know, I think voters have had enough. I’ve been around the state. I’ve spoken to thousands of them,” she said. “Enough of the lies, the broken campaign promises, billionaires trying to run the world. You know, look, I’m the adult in the room. No gimmicks, no nonsense, straight shooter, the woman who gets things done. And we certainly can’t afford a leader who thinks grandstanding is actually governing.”

Mehta reported from Los Angeles and Nixon reported from San Francisco. Data and graphics journalists Gabrielle LaMarr LeMee and Hailey Wang contributed to this report.

SUNSEEKERS heading to Hawaii must now shell out more money to cover a tourist tax hike.

Government officials have praised it as a new “green fee,” but opponents have slammed it as a “surf tax” which bumps up accommodation prices.

Hawaii Gov. Josh Green signed legislation last May to generate an estimated nearly $100 million annually.

The “green fee” adds about $3 per night to your bill if you’re booking a $400-per-night hotel room, according to Aloha Hawaiian Vacations.

“Some are praising it as a much-needed environmental investment,” it added.

“Others feel like it’s just another added cost at a time when tourism still hasn’t fully bounced back post-pandemic.”

Forbes described it last month as a “first-of-its-kind visitor levy in the United States aimed at funding climate resilience and environmental conservation in the state.”

The levy raises rates on hotel room, vacation rentals and short-term rental stays.

The government also wanted to charge cruise line passengers, but the new charge is being challenged by industry officials in a lawsuit.

Money raised through the tax is to be invested in climate disaster resilience and environmental protection, according to the government.

“Visitors are willing to pay a climate impact fee in order to support Hawaiʻi’s environmental protection efforts and preserve the beauty and cultural heritage of the islands for future generations,” it explained last May.

SURF TAX

But, some tourists have resisted what they’re calling a “surf tax” said the Robb Report.

There’s also been some negative comments on social media, where it’s been slammed as a “money making” venture, and a “disgusting cash grab” which will “make Hawaii even more unaffordable.”

“We have no emissions testing on cars in Hawaii, but now we’re suddenly concerned about pollution and are going to place a climate tax on tourists?” asked one resident.

“This is about greed and incompetence, not the environment.”

Hawaii does not require a mandatory tailpipe emissions test – also known as a “smog check,” for vehicle registration, said Engineer Fix.

“Unlike many states that quantify pollutants like hydrocarbons and nitrogen oxides, Hawaii does not perform this type of performance-based assessment.”

Visitors have been charged the new levy since January 1, after it was signed into law last May.

The tax was prompted by recent natural disasters, including the 2023 Maui wildfires that killed more than 100 people and destroyed thousands of structures.

It raises the state’s transient accommodations tax (TAT) by 0.75% for a total of 11% placed upon the nightly lodging rate, said the governor last May.

Prior to its approval, officials had signaled hopes to slug tourists $40 to raise “$200 million in conservation workforce revenue.”

However Senate Bill 1396 instead increased the TAT rate by a more modest 0.75% – rather than a higher fee.

Supporters are thrilled that money raised will be spent on projects such as replenishing beach sand, coral reef rehabilitation, plus fire prevention projects.

“As an island chain, Hawaii cannot wait for the next disaster to hit before taking action,” said Gov. Green last June.

“We must build resiliency now, and the green fee will provide the necessary financing to ensure resources are available for our future.”

The cruise ship industry has managed to avoid the fee – for now.

An 11th-hour reprieve was granted by the federal appellate court, reported Civil Beat on January 1.

“Judges upheld the cruise industry’s request that its ships not have to pay the new fee while in port — or to pay any of the visitor taxes already charged to hotels and vacation rental owners — while the battle over their inclusion plays out in court.

“That means Hawaii will see a 10% decrease in expected revenue from the nation’s first green fee while the injunction is in effect.

“That reduction would become permanent if the industry’s main trade group, Cruise Lines International Association, prevails in court.”

Reporting from Sacramento — Soda companies got a respite last week from battling local taxes on sugary beverages, after California lawmakers grudgingly passed a 12-year ban on cities and counties imposing the levies.

That reprieve might be short-lived.

Major healthcare groups announced Monday that they will pursue a statewide soda tax initiative on the 2020 ballot to pay for public health programs. And in another jab at the beverage industry, the initiative would enshrine in the California Constitution the right of local governments to impose soda taxes.

“Big Soda has been a major contributor to the alarming rise in obesity and diabetes,” said Dustin Corcoran, chief executive of the California Medical Assn., a principal backer of the initiative. “We need to address this crisis now, and this initiative gives voters a real opportunity to do that.”

The proposed 2-cents-per-fluid-ounce tax would mean an additional 24 cents tacked onto the cost of a 12-ounce can, or an extra $1.34 for a 2-liter bottle sold in the state.

The proposal sets the stage for a marquee statewide battle between health groups and the soda industry — a feud that has been simmering in California’s cities and counties for years and burst into full view in the state Capitol last week.

California bans local soda taxes »

With the battle lines forming for 2020, the soda industry has had little time to savor its recent victory.

The companies won a 12-year ban on local soda taxes from legislators in exchange for a promise from business groups to withdraw a ballot initiative that would have required cities and counties to get supermajority approval from voters to raise any new taxes. That initiative, which had qualified for the November ballot, panicked mayors and labor groups representing local government workers with the prospect of a higher vote threshold that could stymie efforts to collect new tax revenue for cities and counties.

Minutes after Gov. Jerry Brown signed the bill that contained the soda tax ban, proponents pulled their broader tax initiative from the ballot.

The eleventh-hour deal infuriated public health groups and a number of legislative Democrats, who likened the soda industry’s leverage play to “extortion.”

“We were disappointed that the American Beverage Assn., and their member companies, went to such great lengths to take away the right of Californians to vote for better health,” said Nancy Brown, chief executive of the American Heart Assn.

But the maneuver prodded the California medical and dental associations to respond. The initiative, according to proponents, would raise between $1.7 billion and $1.9 billion in a statewide levy on soda and other sugary beverages, with money going toward programs to combat and prevent diabetes and obesity — both commonly linked to consumption of those drinks.

The tax would not apply to diet sodas, fruit and vegetable juices with no added sugar and drinks in which milk is the primary ingredient.

“Big Soda may have won a cynical short-term victory but, for the sake of our children’s health, we cannot and will not allow them to undermine California’s long-term commitment to healthcare and disease prevention,” Corcoran and Carrie Gordon, chief strategy officer of the California Dental Assn., said in a statement.

Brown of the American Heart Assn. said her group backs a statewide tax and efforts to roll back the local ban.

“We will be relentless in our work with communities across the state to improve public health through a statewide tax, and to restore the rights of Californians to vote for what they believe best supports health in their state,” she said.

The two organizations partnered with other public health groups, along with the Service Employees International Union, to successfully raise tobacco taxes by $2 per pack in 2016.

“Everyday grocery shoppers in California are struggling with affordability in the state — from housing to transportation to taxes. Rather than further driving up costs at the supermarket, we believe there is a better way for health advocates, government and California’s beverage companies to work together to help people reduce sugar consumption while at the same time protecting consumers’ pocketbooks and the small businesses that are so vital to our communities,” said William M. Dermody Jr., spokesman for the American Beverage Assn.

The soda industry has long fended off taxes at the state and local level. Berkeley became the first to pass a tax in November 2014 and since then, three other Bay Area cities — San Francisco, Oakland, and Albany — have imposed their own levies.

Until recently, the battle over a statewide soda tax had been fought — and won — by the industry in the Legislature. A recent legislative analysis counted proposals dating back to 1983 that had fizzled at some point during negotiations in Sacramento.

One recent effort was a 2013 bill by state Sen. Bill Monning (D-Carmel) to impose a penny-per-ounce tax, half the size of the tax under the proposed initiative. Assemblyman Richard Bloom (D-Santa Monica) sought a 2 cent-per-ounce tax in two successive bills in 2015 and 2016; both measures failed to advance.

“These products are dangerous,” Monning said last week during Senate debate over the bill that now bans local soda taxes. “We label and tax tobacco because we know what it does. We should label and tax these products and let people have informed choice.”

Times staff writer John Myers contributed to this report.

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melanie.mason@latimes.com

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Carney has been under pressure from the opposition to lower prices of food and other essentials for lower-income people.

Canadian Prime Minister Mark Carney has announced a multibillion-dollar package as part of a series of measures aimed at lowering the costs of food and other essentials for low-income families.

On Monday, Carney announced a five-year 25 percent boost to the Goods and Services Tax (GST) credit that starts this year.

The GST credit, which is being renamed the Canada Groceries and Essentials Benefit, will provide additional, significant support for more than 12 million Canadians, Carney said in a statement.

The government will also provide a one-time top-up equivalent to a 50 percent increase this year to eligible residents.

“We’re bringing in new measures to lower costs and make sure Canadians have the support they need now,” Carney said.

The measures would cost the government 3.1 billion Canadian dollars ($2.26bn) in the first year and between 1.3 billion Canadian dollars ($950m) and 1.8 billion Canadian dollars ($1.3bn) in each of the following four years, he told reporters at a news conference, according to the Reuters news agency.

While overall consumer price inflation in Canada has eased and came in at 2.4 percent for December, “food price inflation remains high due to global and domestic factors, including supply chain disruptions, higher US tariffs from the trade war and climate change/extreme weather”, Tony Stillo, director of Canada Economics at Oxford Economics, told Al Jazeera.

The government is also setting aside 500 million Canadian dollars ($365m) from the Strategic Response Fund to help businesses address the costs of supply chain disruptions without passing those costs on to Canadians, and will create a 150 million Canadian dollar ($110m) Food Security Fund under the existing Regional Tariff Response Initiative for small and medium enterprises and the organisations that support them.

Changing landscape

“The global landscape is rapidly changing, leaving economies, businesses, and workers under a cloud of uncertainty. In response, Canada’s new government is focused on what we can control: building a stronger economy to make life more affordable for Canadians,” Carney said.

The new measures were unveiled on the day Parliament resumes after its winter break.

Opposition parties have urged Carney to reduce prices of daily goods, especially as sections of the economy have come under pressure from United States President Donald Trump, who has slapped 35 percent tariffs on the country as well as separate tariffs on steel, aluminium and lumber, leading to job losses in those sectors.

Over the weekend, Trump escalated his threats and said he would impose a 100 percent tariff on Canada if it makes a trade deal with China. Carney has been working on diversifying Canada’s exports away from the US, its biggest trading partner and to which nearly 80 percent of its exports went last year, including by increasing business with other markets like China.

In the roiling debate over California’s proposed billionaire tax, supporters and critics agree that such policies haven’t always worked in the past. But the lessons they’ve drawn from that history are wildly different.

The Billionaire Tax Act, which backers are pushing to get on the November ballot, would charge California’s 200-plus billionaires a one-time, 5% tax on their net worth in order to backfill billions of dollars in Republican-led cuts to federal healthcare funding for middle-class and low-income residents.

Critics of the proposal have argued that past failures of similar wealth taxes in Europe prove they don’t work and can cause more harm than good, including by driving the ultra-rich out. Among those critics is San José Mayor Matt Mahan, a tech-friendly Democrat who is contemplating a run for governor.

“Over the last 30 years, we’ve seen a dozen European countries pursue national-level wealth taxes,” Mahan said. “Nine of them have rolled them back. A majority have seen a decline in overall revenue. It’s actually shrunk the tax base, not increased it, and it’s because it creates a perverse incentive and drives capital flight.”

Backers of the measure acknowledge such failures but say that they learned from them and that California’s proposal is stronger as a result.

Brian Galle, a UC Berkeley tax law professor and one of four academic experts who drafted the measure, said if it gets on the ballot, every voter in the state will receive a copy of the full text, a one-page explainer on what it does, and nearly two dozen additional pages of “rules for preventing wealthy people and their army of lawyers from dodging” it.

Many of those rules, he said, are based on historical lessons from places where such taxes have failed, but also where they’ve succeeded.

“If you understand the actual lessons of history, you understand that this bill is more like the successful Swiss and Spanish wealth taxes,” Galle said. “Part of that is learning from history.”

Warnings from Europe

Since the 1990s, several European countries have repealed net wealth taxes, including Austria, Denmark, Finland, France and Germany.

A major example cited by critics of the California proposal is France, which implemented a much larger wealth tax on far more people, including many millionaires. The measure raised modest revenues, which fell as rich people moved out of the country to avoid paying, and the measure was repealed by the government of President Emmanuel Macron in 2017.

In a 2018 report on net wealth taxes, the Paris-based Organization for Economic Co-operation and Development found that European repeals were often driven by “efficiency and administrative concerns and by the observation that net wealth taxes have frequently failed to meet their redistributive goals.”

“The revenues collected from net wealth taxes have also, with a few exceptions, been very low,” it found.

Critics and skeptics of the California proposal say they expect California to run into all the same problems.

Mahan and others have pointed to a handful of prominent billionaires who already appear to be distancing themselves from the state, and said they expect more to follow — which Mahan said will reduce California’s “recurring revenue” beyond the amount raised by the one-time tax.

Kent Smetters, faculty director of the Penn Wharton Budget Model, which analyzes the fiscal effects of public policies, said net worth taxes in other countries have “always raised quite a bit less revenue than what was initially projected,” in large part because “wealth is easy, as it turns out, to try to reclassify or move around” and “there’s all these tricks that you can do to try to make the wealth look smaller for tax purposes.”

A bus in London promotes a campaign by British millionaires advocating for an end to extreme wealth and inequality.

(Carl Court / Getty Images)

Smetters said he expects that the California measure will raise less than the $100 billion estimated by its backers because billionaire wealth in California — much of it derived from the tech sector — is relatively “mobile,” as many tech barons can move without it affecting business.

“Policymakers have to understand that they’re not going to get nearly as much money as they often project from a purely static projection, where they’re not accounting for the different ways that people can move their wealth, reclassify their wealth, or even just move out of the state,” Smetters said. “So far, we only know of a few people — with a lot of money — who have moved out of the state, [but] that number could go up.”

Kevin Ghassomian, a private wealth lawyer at Venable who advises rich clients, said he expects the administrative costs of enforcing the tax to be massive for the state — and much greater than the drafters have anticipated.

On the front end, the state will face a wave of legal challenges to the tax’s constitutionality and its retroactive application to all billionaires living in the state as of the end of 2025.

Moving ahead, he said, there will be litigation from wealthy individuals whose departure from California is questioned or who dispute the state’s valuation of their net worth or individual assets — including private holdings, which the state doesn’t have extensive experience assessing.

Valuating such assets will be “a nightmare, just practically speaking, and it’s going to require a lot of administrators at the state level,” Ghassomian said, especially considering many California billionaires’ wealth is in the form of illiquid holdings in startups and other ventures with fluctuating market valuations.

“You could be a billionaire today, and then the market plummets, and now all of a sudden, you’re a pauper,” he said. “It could really lead to some unfair results.”

Lessons from Europe

Backers of California’s proposal said they have accounted for many of the historical pitfalls with wealth taxes and taken steps to avoid them — including by making it harder for wealthy Californians to simply shuffle money around to avoid the tax.

“There are a lot of provisions that are designed based on what has worked well in other countries with wealth taxes in the modern era, especially Switzerland, and there are also provisions meant to shut down some of the holes in some of the earlier wealth tax efforts, especially the France one, that were viewed as not successful,” said David Gamage, a University of Missouri tax law professor and another of the proposal’s drafters.

Galle said the Organization for Economic Co-operation and Development study found that many of Europe’s historical wealth taxes “hadn’t figured out how to solve the problem of what small businesses were worth,” so were more narrowly focused on publicly traded stock and real estate. “Over time, there was a lot of abuse where people shifted their assets to make them look privately held.”

The California proposal “tries to solve that problem” by including small businesses and other privately held wealth in their calculations of net worth, he said — and benefits from the fact that such wealth has gotten a lot easier to track and appraise in recent years.

Doing so would be a familiar exercise for many California billionaires already, he said, as it is hard to raise venture capital, for example, without audited financial statements.

Backers of the measure said it is harder for U.S. citizens to avoid taxes by moving abroad than it has been for Europeans, and that evidence from Switzerland and Spain suggests differing tax rates between a nation’s individual states do not cause massive interstate flight.

San José Mayor Matt Mahan, who might run for governor, opposes the proposed tax on California billionaires.

(Rich Pedroncelli / Associated Press)

For example, each state in Spain sets its own wealth tax rate, and Madrid’s is 0% — but that has not caused an exodus from other parts of Spain to Madrid, Galle said.

The risk of California billionaires avoiding the tax by simply moving to another U.S. state was further mitigated by the measure’s Jan. 1 deadline for avoiding the tax. Galle said the deadline “was intended to make it more difficult for individuals to concoct the kind of misleading, apparent moves that wealthy people have used in other places to try to avoid a wealth tax.”

Gamage said that “history shows if a tax on the wealthy can be avoided by moving paper around, claiming that you live in another location without actually moving your life there, moving assets to accounts or trusts nominally in foreign countries or other jurisdictions, you see large mobility responses.”

But when “those paper moves are shut down,” there’s much less moving — and “that’s the basis for the California model,” he added.

The outlook

Ghassomian, who said he has been “fielding a lot of inbound inquiries from clients who are just kind of worried,” said it is clear that the proposal’s authors “have done their homework” and tried to design the tax in a smart way.

Still, he said, he has concerns about the cost of administering the tax outpacing revenues, especially amid litigation. Residency battles alone with billionaires whose claims of departing the state are questioned could take “years and years and years” to resolve, he said.

“The revenue has to line up with expenditures, and if you can’t count on the revenue because it’s going to be tied up in courts, or it’s going to be delayed, then I think that creates some real logistical hurdles,” he said.

Smetters said predicting revenues from a tax on so many different types of assets is “really hard,” but one thing that has generally held true through history is that “most countries, even with less-mobile wealth, typically do not get the type of revenue that they were hoping for.”

David Sacks, a venture capitalist and President Trump’s AI czar who decamped from California to Texas, said on the sidelines of the World Economic Forum in Davos, Switzerland, last week that the measure was an “asset seizure” more than a tax, and that the state would be headed in a “scary direction” if voters approved it.

Darien Shanske, a tax law professor at UC Davis and another drafter of the proposal, said he and his colleagues did their best to “look at the lessons of the past, and apply them in a way that makes sense and is generally fair and administrable” — in a state where wealth inequality is rapidly growing and a wealth tax presents unique opportunities.

“Having a tax on billionaires does make particular sense in California because of the large number that live here and the large number who have made their fortune here,” he said.

Shanske said the proposed tax is designed to provide California a way to “triage” soaring healthcare premiums resulting from legislation enacted by the Trump administration and congressional Republicans. The proposal asks for contributions from people who will quickly recoup what they are taxed given the exponential growth of their assets, he said.

Emmanuel Saez, director of the Stone Center on Wealth and Income Inequality at UC Berkeley and another drafter of the measure, said many of the repealed European taxes targeted millionaires while providing loopholes for billionaires to avoid paying, whereas California’s measure is “exactly the reverse.”

He said the measure will raise substantial revenue in part because California billionaire wealth more than doubled from 2023 to 2025 alone, and is “the innovative and first-of-its-kind tax on the ultra-wealthy that the moment requires.”

Thomas Piketty, a French economist and author of “Capital in the Twenty-First Century,” called California’s proposed tax “very innovative” and “relatively modest” compared with massive wealth taxes after World War II — including in Germany and Japan — and said it would not only improve healthcare in the state but “have an enormous impact on the U.S. and international political scene.”

“In the current context, with a deeply entrenched billionaire class, wealth taxes meet even more political resistance than in the postwar context, and this is where California could make a huge difference,” he said. “The fact of targeting the revenue to health spending is also very innovative and can help convince the voters to support the initiative.”

Times staff writer Seema Mehta contributed to this report.