Re: Re: New York passes 88 new taxes and fees.

[Guest guest]

There are a few problems with it.

In the main, all taxes are an opportunity cost. By that I mean every dollar that goes to taxes is a dollar less the person can spend on their own. The result is that government ends up being favored over private industry.

Look at it this way: if the cost of a pair of pants goes up by 20% under this tax, then fewer pants will be sold. Not only does that cancel out the desired goal of higher tax revenue, but it also means fewer sales at the stores and also for the clothing makers. Fewer sales puts those private industries in danger of firing people or even closing down.

These taxes on items like soda and clothing in particular are what are called regressive taxes. Regressive taxes have a harder impact on those with lower incomes or incomes otherwise stretched, than the wealthy. In other words. paying an extra 20% for a pair of pants means a lot more to someone earning $15,000 per year or someone with a few kids, than it would to someone making $40,000 or $100,000.

When the luxury taxes were imposed in the 1990's, it was supposed to soak the rich. In reality, it resulted in tens of thousands of people losing jobs as "the rich" stopped buying or found alternative suppliers, and businesses folded.

The other major problem is that the problems these states and the Fedgov are having isn't one of taxes, it is one of spending. Taxes are already very, in some places the combined Federal state and local taxes exceed 60% of income. That is a tremendous opportunity cost and loss of person freedom. Even with these high taxes, the government still spends more than it takes it and has forwarded many of these costs decades into the future. Already the current interest on the Federal Debt alone is over $400 billion per year and rising. Total projected debt (including Social Security and Medicare) will be in excess of $60 Trillion by 2040. The payments on that per person is incredible.

So, what these government need to do is to cut spending, preferably targeting pork project, redundant social programs before targeting police, fire, etc., and reducing taxes to the balance point, the point that maximizes both tax revenues and economic growth. We are well above that level now yet still they spend more and demand more taxes.

In a message dated 12/17/2008 2:05:56 A.M. Eastern Standard Time, no_reply writes:

I actually do not see much wrong with it. Basically everything except motor vehicle licensing and registration, parks and auto insurance fees are either a sin tax or a luxury tax. AdministratorMake your life easier with all your friends, email, and favorite sites in one place. Try it now.