California just notched a new, unwanted record. Gov. Gavin Newsom signed off on a state budget in June that the California Taxpayers Association is calling “the largest tax increase in state history,” and the bill is now landing on Californians already squeezed by the nation’s highest cost of living, according to the New York Post.
Newsom and Democratic lawmakers signed off on two new levies. One extends a tax on health care providers to raise roughly $2 billion a year for Medi-Cal — a hike insurers are expected to pass straight to customers, adding about $100 a year for an individual and $400 a year for a family of four. The other reclassifies “prewritten” software as taxable personal property, layering the state’s highest-in-the-nation sales tax onto everyday digital tools.
That means anything from Slack to Adobe to TurboTax to AI assistants now carries an extra tax bill. Some California jurisdictions, like Lancaster and Palmdale, already charge close to 12% in combined sales tax — and the software tax rides on top of that rate.
“Whether you get the product from the store or download it is all going to be subject to an additional roughly 10% tax, depending on what jurisdiction you are in the state of California,” longtime lobbyist Chris Micheli told ABC10.
State Republicans aren’t buying Sacramento’s math. “Record spending does not equate to better quality of life, and anyone living in California for the last decade would likely agree. This budget is bad for job creators and workers,” said Sen. Roger Niello.
Legislative analysts warn the pain won’t stop at the businesses writing the checks. “Taxing business purchases, however, can raise costs for consumers even more than a direct tax on consumption,” wrote Seth Kerstein, an economist at the Legislative Analyst’s Office. “This is because businesses often pass such taxes on to consumers anyway, and additionally, such taxes can create inefficiencies that raise costs even further.”
Newsom’s office, naturally, isn’t taking the blame. “This is Trump’s tax — thanks to his Big Beautiful Betrayal HE signed last year, California law needed to be changed,” the governor’s press shop posted on X. “TRUMP hiked your costs, not Governor Newsom!”
Let that sink in: Sacramento wrote the checks, Sacramento passed the vote, and Sacramento’s governor still wants Washington to eat the blame. The software tax alone is projected to bring in $900 million a year — mostly from business-to-business transactions the Legislative Analyst’s Office admits will still trickle down to ordinary Californians’ bills. Combined with the health care premium hikes, the state is asking residents to foot record spending while insisting someone else signed the invoice.
Source: nypost.com
