The Daily Delegate

This bill proposes implementing a Value-Added Tax (VAT) to generate additional revenue for state programs and infrastructure. The VAT would apply to goods and services at multiple stages of production, similar to systems used in Europe. Proponents argue that a VAT could create a more stable revenue stream, reduce reliance on income taxes, and capture untaxed economic activity. However, critics warn that it could disproportionately impact low-income consumers by raising prices and add complexity for businesses already navigating California’s tax system. If passed, California would be the first U.S. state to adopt such a tax, potentially setting a precedent for others.