7% Sales Tax Met With Surprise and Skepticism

At his desk at Lou Ehlers Cadillac on Wilshire Boulevard, manager Ed Waggaman was feeling secure. A new, higher Los Angeles County sales tax had just gone into effect Monday morning, but customers were out on his showroom floor admiring a shiny blue Fleetwood.

“I don’t think it’ll affect our business,” said Waggaman, watching his potential buyers climb in and out of the $40,000 car, pushing dashboard buttons and slamming the doors with abandon.

But minutes later, the customers left without buying the Fleetwood. Hilten Shah and his friends cited the sales tax as one more reason not to buy. In search of a new car, Shah said the tax increase “does matter. I might buy in Riverside County rather than Los Angeles because of that.”

The scene inside the dealership showed the differing attitudes among county merchants and buyers to the new 7% sales tax, which rose from 6.5%. The tax hike was approved by voters last year to help finance transportation programs.

On the new tax’s first day, reactions ranged from indifference to surprise and frustration, as well as skepticism over whether the increase will really help public transportation.

“I don’t like hearing that,” Waggaman said after told of Shah’s reaction. Pointing out that the $30,000 DeVille, “our most popular model,” was only $150 higher with the tax hike, Waggaman asked: “If you were to purchase a new car, would $150 dissuade you? I don’t think this will affect anyone.”

Determinations depended upon the buyer’s vantage point. On Sunset Boulevard in Hollywood, Teofilo Barragan stood outside Circuit City, thinking about buying a sound system for his van. When told about the new rate, the 29-year-old maintenance man said: “You’re kidding. That’s terrible.”

The sound system might cost him $1,200. Even though the new tax would cost him an extra $6, he still thought he would feel a financial pinch. “That’s money I might use for gas,” he said.

Outside the BodhiTree Book Store in West Hollywood, 22-year-old William Archila emerged with a $10 book of Langston Hughes poetry. The new tax cost 70 cents. “I was pretty amazed,” he said, adding that he was glad he had not bought something more expensive, such as a dictionary.

Archila, a teaching assistant for the Los Angeles Unified School District, said he was worried that the tax would not alleviate transportation problems any more than state lottery proceeds have helped their intended beneficiary, public education.

“Are we really going to see anything from this?” he asked. “We haven’t seen anything much from the lottery.”

On Melrose Avenue, Rafi Dagnn said he was sick of readjusting the cash register at his dress shop, Slique. Just last Jan. 1, he had switched the sales tax to 6.5%, from 6.75%, after the state earthquake tax expired, he said.

“Now it’s 7%,” he complained. “What’s this for, the war? Who needs all this trouble?”