Category Archives: Tax Hike Watch

Well golly gee. When unemployment is up and people aren’t working, tax revenue ALSO goes down. Who knew??

Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.

When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. “It illustrates how severe the recession has been.”

For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.

Yes, this IS staggering. And with Boomers getting to retirement age and looking to collect Medicare and Social Security, the problem will not get better. With high unemployment, people are looking to live on unemployment instead of, you know, a paycheck. This is a double whammy, because not only is the government paying out, they are also not collecting revenue from it.

What got us out of the last recession in the early 80′s? Consumer spending. What’s not cool about it is that the generation that would normally help us spend our way out of this mess is not in a position to do so. They’re saving for retirement, not pouring their money into the economy. John Lonski, chief economist for Moody’s Investors Service, says they’re just “too old to do it now”.

How are we going to make up for these huge losses in tax revenue? I’m going to go out on a limb here: It will come out of our pockets. Just remember this:

[youtube=http://www.youtube.com/watch?v=6HE-rGGKksQ]

Good grief. I thought that the taxes on soda were bad enough.

From AP:

Details of the proposed beer tax are described in a Senate Finance Committee document distributed to lawmakers before a closed-door meeting Wednesday. Senators are focusing on how to pay for expanding health insurance for an estimated 50 million uninsured Americans, a cost that could range to some $1.5 trillion over 10 years.

Taxes on wine and hard liquor would also go up.

And there might be a new tax on soda and other sugary drinks blamed for contributing to obesity. A tax of 3 cents per 12-ounce drink would raise about $50 billion over 10 years, according to congressional estimates. Diet drinks, however, wouldn’t be taxed.

Stop trying to control what we consume. Not cool. If you like regular Coke over Diet, you’ll be taxed. If you want a glass of red wine with dinner (which, by the way, has proven health benefits) you’ll be taxed. Walk outside and breathe air, you’ll be taxed. By exactly how much?

Wine taxes would rise by 49 cents per bottle, from the current 21 cents.

And the tax on hard liquor would increase by 40 cents per fifth, from the current $2.14.

Percentage-wise, wine drinkers would take the biggest hit, a 233 percent tax increase per bottle.

It. Never. Stops.

Yesterday, California voted in a special election. The results are in.

From ABC:

SOUTHLAND (KABC) — Tuesday’s statewide special election polls are closed. Turnout was expected to be low, even though the stakes are high.

Proposition 1F, which prevents certain state officials from receiving pay raises when California has a budget deficit, has passed. Propositions 1A, 1B, 1C, 1D and 1E have been rejected.

Maybe people are waking up? Check out Pelosi’s approval ratings. Not even Democrats like her anymore. Here’s hoping this is a trend in California.

UPDATE:

Here are the numbers from the special election:

1A) Rainy Day Fund NO 65%, Yes 34%
1B) Education Funding NO 62%, Yes 37%,
1C) Modernize Lottery NO 64%, Yes 35%
1D) Child Service Funding, NO 65%, Yes 34%
1E) Mental Health Budget , NO 66%, Yes 33%
1F) Limit Lawmaker Salaries YES 73%, NO 26%

So much for the liberals that don’t mind paying taxes. These were not small defeats.

Again, California makes big decisions.

As Californians struggle with joblessness, home foreclosures and sharp losses in the stock market, the state has raised taxes, cut spending and borrowed to fix a $42-billion shortfall — and still remains more than $15 billion shy of a balanced budget.

If voters reject Propositions 1C, 1D and 1E — the three chief money-raisers on Tuesday’s special election ballot — the shortfall will grow to $21 billion.

Despite the high stakes, voter turnout is expected to be sparse for an election that also includes a fiercely contested runoff for Los Angeles city attorney and races to fill vacancies in the 32nd Congressional and 26th state Senate districts.

As of Monday afternoon, more than 2.4 million of California’s 17.2 million registered voters had cast ballots by mail, election officials said. Polls will be open from 7 a.m. to 8 p.m.