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Republicans Say New Entertainment Tax Would Hurt State’s Tourism Industry

By: Bill Curtis
11:36 PM Wednesday, November 19th, 2008
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SACRAMENTO – As if taxing people where they live and work is not enough, some in Sacramento have proposed a new “entertainment tax” on the tickets Californians buy to theme parks and baseball games as one way to address the state’s estimated $11.2 billion budget deficit.

The entertainment tax increase would slap the current state sales tax of 5 percent on amusement parks such as Disneyland and Magic Mountain and sporting events held in the state. If another proposal to increase the sales tax by 1.5 percent is approved, the tax increase would be 6.5 percent. This would cost tourists and local families hundreds of millions of dollars, causing them to visit less often and spend less on an industry that is one of California’s main economic engines.

Republicans said the new entertainment tax would hurt many California businesses especially hard, many of whom depend on nearby attractions and stadiums for customers. They said the state should focus on alternatives to lower costs and turn the economy around, instead of raising taxes.

GOP lawmakers argued that raising taxes is the wrong approach to addressing the state’s budget problems, saying tax increases would hurt the economy and threaten jobs. They said the Legislature should be focused on cutting wasteful spending and encouraging job creation.

The entertainment tax is just one of the many higher taxes totaling $4.7 billion being proposed to bridge the state’s budget deficit. Other proposals include raising taxes on auto repair, cars, veterinarian services and oil.

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