Friday, January 16, 2009

Raising Consumer Taxes Not Class Specific

One of Barack Obama's main campaign promises is that he wouldn't raise taxes for 95% of Americans, or basically the middle class. The problem though, isn't income taxes. States across the country are facing budget shortfalls, and the easiest ways to make up the difference is through tax increases. Even worse, states will raise consumer taxes, which raise equally no matter who you are, or how much you make. Gas taxes, liquor taxes, and other sales taxes are being proposed across the country. These taxes will end up affected lower incomes the most, as they have the least amount of discreationary income but still need basic goods which will be seeing tax increases. Thus, no one will be able to escape these taxes.

Some examples:

Idaho Gov. Proposes Gas Tax Increase.

Massachusets Gov. Open to Fuel Tax Increases, With Conditions.

Miller (MD.) Open to Raising Tuition and Gas Tax.

There are also proposals for gas tax increases in New Hampshire, Illinois, and Oregon.

We've also seen legislation proposed to raise liquor taxes in Kentucky and Arkansas.

The bottom line here is that even though income taxes might not be raised, the governemnt is going to get extra revenue any way it can.

When faced with a budget shortfall, instead of raising taxes, the government could, get this...CUT SPENDING! But we're going to spend our way out of this recession. Rather than encourage fiscal responsibility amongst state governments, we're going to offer a "use it or lose it" spending stimulus to the states, and my guess is they'll use it.

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