Cost of living is consistently a concern for citizens across the nation. With prices increasing and tax adjustments being made, many citizens are feeling the pinch. Recently, Los Angeles has announced a sales tax rate increase, a move which is expected to have a significant impact on consumers and producers alike. However, the tax initiative is to go towards addressing the homelessness crisis in the city. While the increase in tax may cause groceries to be higher, the long term effects are intended to have a net positive impact.
The homelessness crisis in Los Angeles
Over 45,000 people in Los Angeles are homeless. Due to differing opinions on what constitutes as “homeless” as well as the difficulty in getting an accurate count of the homeless population, this number is estimated to be much larger. Almost half of all homeless people in the US live in the State of California, home to Los Angeles. Local and state governments have been making a concentrated effort to address the crisis.
One of the biggest barriers homeless people face is the ability to access affordable housing. Changes in public policy are required to increase the amount of affordable housing available, slow down rent increases, and stop evictions that aren’t justified in order to decrease the number of homeless people. In addition, more funding is required to expand the provision of rental subsidies and social services, as well as provide pathways for homeless people to earn an income.
Sales tax hits Los Angeles to address homelessness
Recently, a new sales tax measure was approved by voters in the Los Angeles county. Measure A is set to replace the previous Measure H, a measure passed in 2017 which raised the sales tax by a quarter cent in an effort to address the homelessness crisis. While Measure H was supposed to only expire in 2027, Measure A is now set to replace before this expiry date.
According to the county’s Homeless Initiative, Measure A from Los Angeles County aims to increase the number of affordable housing units in the county, decrease the number of people who become homeless and live on the streets due to mental or substance use disorders, and increase the number of people who move from encampments into permanent housing.
The new measure will see sales tax increase from 9.5% to 9.75% for people in unincorporated areas which did not not implement their own voter-approved sales tax. 60% of the proceeds gained from Measure A will go towards homeless services in Los Angeles while the other 40% will be contributed directly towards housing production. Cities in the Los Angeles county will all have 0.25% tax increase, regardless if their sales tax rate is higher than 9.5%.
Ensure you plan adequately for your retirement
An aspect of homelessness which many people may not be aware of is the number of senior citizens who are homeless. Approximately 138,098 individuals in the US who have experienced homelessness are over the age of 55, representing approximately 20% of the nation wide homeless population. They are also the fastest growing group to experience homelessness, with this number is expected to triple by 2030 according to The National Alliance to End Homelessness.
It is essential that you begin planning for your retirement as early as possible. While many individuals rely entirely on their Social Security benefits once they are retired, it is critical that you ensure you have multiple sources of income to support you once you stop working. If you invest your money in a low-risk fund, you can take advantage of compound interest while minimizing the risk associated with investing. Diversifying your retirement income is critical to ensuring stability in your old age.
