Los Angeles Hikes Sales Tax Rates: Here’s Why It’s Bad News for the County

Across the United States, the cost of living is a growing concern for many residents. In light of rising prices and changes in taxation, individuals are feeling the financial strain. Recently, Los Angeles announced an increase in the sales tax rate. This decision is anticipated to significantly affect both consumers and businesses. However, the purpose behind this tax increase is to fund solutions for the city’s homelessness crisis. Despite the potential for higher grocery bills, the expected long-term benefits of this policy are seen as overwhelmingly positive.

Addressing the Homelessness Crisis in Los Angeles

More than 45,000 individuals in Los Angeles are currently without a home. This figure may be underestimated due to the challenges in defining and counting the homeless population. Nearly half of the homeless population in the United States resides in California, particularly in areas like Los Angeles. Both local and state governments have been actively working to tackle this issue.

One of the primary obstacles faced by the homeless is securing affordable housing. To reduce homelessness, policy reforms are needed to increase affordable housing availability, curb rent hikes, and prevent unjust evictions. Additionally, there is a need for more funding to expand rental assistance and social services, and to create opportunities for homeless individuals to generate income.

New Sales Tax Initiative in Los Angeles Aims to Combat Homelessness

The voters of Los Angeles County recently approved a new sales tax measure. Known as Measure A, it will supersede Measure H, which was passed in 2017 and increased sales tax by a quarter of a cent to help address homelessness. Although Measure H was not due to expire until 2027, Measure A will take effect earlier.

According to the county’s Homeless Initiative, Measure A from Los Angeles County is designed to boost the number of affordable housing units, reduce the incidence of homelessness, particularly among those with mental health or substance abuse issues, and help move people from encampments into permanent housing.

The implementation of Measure A will raise the sales tax from 9.5% to 9.75% in unincorporated areas that have not passed their own sales tax measures. Of the revenue generated, 60% will be allocated to homeless services and 40% to housing production. All cities within Los Angeles County will experience a 0.25% increase in sales tax, regardless of whether their current rate exceeds 9.5%.

Planning for Retirement is Crucial

A lesser-known aspect of homelessness is the number of elderly individuals who are homeless. Approximately 138,098 homeless individuals in the U.S. are over the age of 55, making up about 20% of the national homeless population. This group is also among the fastest-growing segments within the homeless community, with their numbers expected to triple by 2030, according to The National Alliance to End Homelessness.

It’s vital to start planning for retirement early. While many people depend solely on Social Security benefits after retirement, it’s crucial to have multiple income streams for adequate support. Investing in a low-risk fund can leverage compound interest while minimizing investment risks. Diversifying your retirement income is essential for ensuring financial stability in your later years.