by Jack Lee
In a recession the private sector makes across the board cuts in order to stay afloat, but in government it works a little different. They have boxed themselves in with mandated spending programs, so when their revenues begin to dry up their first reaction is to find more creative ways to replace the lost revenue and the easiest way to do that is by taxing. Sometimes these new taxes are called fees or revenue, but don’t be fooled, anything that comes from your pocket and goes into the govenment’s is a tax.
Enter new taxes: In Washington state a six pack of beer is now taxed at 3 times the previous tax rate. Arizona towns are raising their hotel tax to as high as 14.07%, that ought to help slow tourism. Not to be outdone, Connecticut, who also suffers from too much tourism, wants to raise their hotel tax to 15%.
New Jersey is about to impose the largest property tax increase in their state’s history. New Jersey had been raiding county funds and last year they skipped a $3 billion pension payment to meet budget shortfalls. New Jersey has lost over 17% of tax revenue in the past two years, the largest drop in 40 years and their situation is not uncommon among the other states.
A new fed tax on tanning beds will jump your tanning costs by 10%. In California the Canabis Tax Act looks like it could be a winner with 56% polled in favor. California is also considering a tax on soda pop that says for every spoonfull of sugar the soda will be taxed 1 cent. This would raise 1.5 billion dollars, so they say. In Washington D.C. they are taxing plastic bag like you use in the grocery store. In Maine they are taxing blueberries. In West Virginia they are taxing anything that makes noise like party noise makers or firecrackers, etc. Some states are even imposing a new tax on internet dating sites. And you know these taxes won’t go away even when the revenue stream increases, that’s never how it works…once in taxes are forever.
The federal capitol gain tax rate will go from its current 15% to 20%. The maximum rate on ordinary income will increase from 35% to 39.6%. This will include dividend income for which the tax rate will increase dramatically from 15% today to 39.6%. The estate tax will estate and gift tax rate will rise to 55% for anything over the one mil exemption. Annuity Trusts are going to be taxed 3.9% more. Social Security tax is expected to increase 3.9%, however for workers hired in 2010 there is 6.02% tax break for the first two months of new employment. The Federal Communications Commission proposes creating a national tax on all digital goods and services and imposing a fee to establish and maintain a national public safety wireless broadband network (this the internet tax and we warned you.)