Tuesday, December 16, 2008

ABA Statement: NY Governor's Sweeping Tax Hikes on New Yorkers Add Strain to Checkbooks and Put Paychecks at Risk All During a Time of Recession

Is this what we are all heading toward in the recession? Higher taxes during a struggling economy?

/PRNewswire-USNewswire/ -- As families are struggling to make ends meet during a recession, it is disappointing that Governor Paterson's budget proposal contains such sweeping tax hikes on hard-working families. In an economy like this, the last thing government should be doing is raising taxes on people.

The governor's proposed budget hikes taxes on an array of consumer goods and services. It imposes an astounding 18 percent sales tax on regular soft drinks and juice drinks -- a regressive tax that will hurt most those least able to pay. And the budget proposal expands the 5-cents-per-container bottle bill tax to include bottled water and juices, again adding to the family grocery bill.

The budget also calls for new taxes or tax hikes on clothing, shoes, gasoline, auto insurance, health insurance, health care, beer, wine, cable and satellite TV, bus and taxi rides, movies, the theater, health clubs, and DMV fees, among other everyday goods and services. It also proposes hikes in college tuition -- and more.

These tax hikes are insensitive to families who are facing tough and painful economic times. Many New York families are already struggling to keep their homes, pay their bills and still buy some holiday gifts, all while hoping that the recession doesn't take their jobs. It's mind-boggling that government would propose to pile onto their struggles with new taxes on so many aspects of their everyday life.

Furthermore, the proposed sales tax on regular soft drinks is simply a facade for raising taxes. Singling out one particular product for taxation won't even make a dent in a problem as complex as obesity. This point is supported by science as well as common sense. If we want to be serious about battling obesity, we need to comprehensively address the consumption of all foods and beverages in moderation and get more active as a society. It's discouraging that some are perpetuating the myth that taxing one product will make a difference in obesity, or even contribute to fighting the problem. It won't.

The severe tax hikes on beverages would put at risk good-paying jobs with good health benefits for many hard-working New Yorkers -- hitting them in both their checkbook and their paycheck. The beverage industry supports 160,000 jobs in New York communities large and small, providing a direct economic benefit to the state economy of nearly $7 billion and an indirect benefit of $25 billion.

We appreciate the budget challenges facing the state. And we look forward to working with the Governor and lawmakers on solutions that don't add to the burden of the people of New York during tough economic times.

During the recent campaign season, the people of New York and America were promised middle-class tax relief. Instead, in New York, they're at risk of getting a giant tax bill added to their already stretched checkbooks. This isn't what taxpayers were promised. And more taxes are not what families need in these tough times.

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