Posted on 12/28/2008 4:52:28 PM PST by Graybeard58
It is well known that massive tax increases lead to reduced consumption of the taxed items or drive consumers into the underground economy. New York Gov. David Paterson seems oblivious to this harsh reality as he proposed 137 new fees and taxes along with sharply curtailed government services to close a $15.4 billion budget deficit for 2009-10.
For Central New York residents who live far from the borders with Vermont, Massachusetts, Connecticut, New Jersey, Pennsylvania and Canada, heavy taxes on such items as sugary soda, movie tickets and haircuts simply will have to be borne. More likely, many of these victims of geography will buy less soda, fewer movie tickets and will let their hair grow longer. Folks who live near the border, however — notably, residents of New York City and its sprawling suburbs — will find it worth the cost and inconvenience to procure these products and services in an adjoining state.
Think we're making this up?
Recall that after the Rell administration and Connecticut legislature raised the cigarette tax from $1.11 a pack to $1.51 2003, then to $2 in 2007, many people quit smoking or got their cigarettes elsewhere.
Tax revenues actually declined from a peak of $280 million in 2004 to $266 million last year.
Likewise, New York. A spokesman for the New York Association of Convenience Stores said after the state raised its cigarette tax in 2002, "New York smokers are not a captive audience. It's too easy to find other places to get cigarettes." Or soda. Or haircuts.
Gov. Paterson seems not to understand that higher taxes encourage tax-avoidance and lead to lower-than-expected state revenues. Most troubling about his plight, however, is he will have to cut deeper and tax higher than he realizes today. And in New York, Connecticut, California and other deficit-saddled states, legislatures seem unwilling to grapple with the brutal fiscal reality their governors at least are trying to confront.
Ping to a Republican-American Editorial.
If you want on or off this list, let me know.
I avoid every Illinois tax I can by buying in Missouri every chance I get, which is fairly often.
Paterson’s an idiot.
But then again, he’s a Democrat.
How bad have things gotten when people drive to Canada to save money on taxes?
I thought the headline said “Dulce et Decorum.” Time for new glasses.
The day in 2000 they raised the cig tax, I quit. Thnx for my health and tens of thousands of dollars in my pocket instead of the nyc coffers.
Good for you!
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