Wednesday, December 17, 2008

New York Proposes New Taxes To Combat Budgetary Shortfalls

Thanks to drastically decreasing tax revenues, states must create new ways to meet their budget obligations. Many states have been able to make ends meet simply by cutting expenses, but this won’t be enough for others. Some states—such as California—have begged the federal government for help, while others—such as New York—are taking matters into their own hands. The governor of New York, David Patterson, is proposing a slew of new taxes that he hopes will help bring the budget in balance.

Considering the state of the economy, most economists would say that the last thing you want to do is raise taxes on consumer goods, but Patterson says he is left with little choice. "This is where we are," Paterson told reporters, according to Alley Insider. "Maybe we should have thought about this when we were depending on what we thought was inexhaustive collections of taxes from Wall Street - and now those taxes have fallen off a cliff."

In total the proposal is for 88 new taxes and fees, including what is being dubbed the “iPod tax,” which is essentially a tax on downloaded entertainment from the internet according to Alley Insider. The goal is to close a budget gap of $15.4 billion.

While these taxes are for the state of New York only, depending on how this proposal works out there could be many states ready to follow in their footsteps. A majority of states are facing budget problems, and with the economy showing little signs of recovering, they need to do something quick. Do they start cutting essential services, or will they raise taxes? That is the question that these states will need to ask themselves.

1 comment:

Anonymous said...

The State of Arizona is considering doing away with property taxes. It's a suggestion that is uninmaginable considering they are in debt by a billion dollars. Tax rates everywhere are heading upwards.