Saturday, October 02, 2010

New Yorkers Awaken To Higher Clothing Taxes

This is the first weekend since the New York legislature eliminated the sales tax exemption on clothing sales of $110 or less. That means that if you buy clothing, you'll be hit with a 4.375% sales tax on those sales.

Counties impose their own sales tax, and they have generally not imposed the sales tax on clothing.

Why did the legislature raise the tax on clothing?

They had to close the budget gap, and figured that the temporary sales tax would raise sufficient revenues. The exemption will be reimposed next April, with clothing sales of up to $55.

The problem with all of this is that the sales tax on clothing was completely unnecessary. The state needed to raise the income because they increased spending even though the state can't afford the higher state budget. Had the state merely held the line on spending, the sales tax was completely unnecessary.

Moreover, you have some proponents of big government (including NYC Mayor Mike Bloomberg) claiming that the sales tax on clothes would have been unnecessary had the state instead imposed tax on carbonated beverages (the soda tax). Again, this argument falls flat because the tax would have been unnecessary had the state contained costs and kept spending in line with last year.

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