According to Governor Paterson, as quoted by The Daily Politics, “the temporary reinstatement of the 4% state sales tax on clothing and shoe purchases of $110 or less will put a strain on those who can least afford it.” The state had backed away from a proposal to tax hedge fund managers the same way those working in other industries are taxed, because doing so might drive that industry out of the state. But all taxes on residents hurt their standard of living, and all taxes on businesses and their owners drive economic activity away. Why should spending on clothing, or the hedge fund industry, receive more consideration than anything else? After all, we’ve lost plenty of industries in this state over the past 40 years, and have a high tax burden overall.
While all taxes hurt, all government spending benefits someone (and some more than others). The problem is that for most people (and almost all future state residents), in New York the pain is greater than elsewhere, and the benefits are smaller, because a large share of what they are paying is going to those with more political power. Or went to those with more political power in the past, who left debts behind. And the situation will get worse and worse, as more and more money is shifted to debt service, pensions for those who got retroactiely enhanced deals far in excess of virtually anyone else, and their unlimited retiree health care. Less and less will be provided in services and benefits.
No shifting around the burdens can change the overall picture. People and firms are still coming to NYC because of its unique characteristics that owe little or nothing to state policy for the past 20 years. Those parts of the state that are in competition with similar areas elsewhere haven’t fared as well. And as the self serving people who control our state government keep grabbing, it is likely they will take NYC down too.
And no matter how the burden is shifted, some things are never considered. Once again, the state made a non-decision that the retirement income of public employees will not be taxed the same way that the income of other workers is taxed, no matter how high that retirement income is, no matter how many decades in retirement they get.
So there you have your winners, those who get money off the top and somehow “deserve” a better deal that everyone else. Today’s seniors, particularly retired public employees, including those who just got a pension “incentive” to retire years earlier. And hedge fund managers. The public employee unions and the Wall Street sharks are the same type people doing the same types of things without much concern about the effect on anyone else. But their arrogance is justified. After all, they own the state legislature, don’t they?