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Abusing the authority to tax (a natural result of granting that authority)
Posted by: McQ on Monday, December 15, 2008

State government may have to make temporary spending cuts, but when it gets itself into deficit trouble from overspending, it turns to the one source of revenue it has - state taxpayers (unlike the Fed, states can't just print money). And it also comes up with some innovative ways to both raise money and push its agenda. Take NY (please):
The plan will come with a host of revenue raisers — increased taxes on hospitals and insurance policies, for instance — and at least one new assessment, a so-called obesity tax on non-diet soda to raise $404 million. The governor also is contemplating requiring new license plates to raise cash, reviving sales tax on clothing purchases, removing the tax cap on gasoline and threatening to require Indian retailers to collect taxes on sales to non-Indians by signing into law a bill passed earlier this year by the Legislature.
Obesity tax? Yup, you fatties take heed - you're the next government project. And, of course, there's always gas and health insurance to turn too.

When you hear all of the talk about the "present system" being too expensive and in need of government intervention, remember this little goodie:
The biggest hits will be to insurance companies, which will be asked to come up with about $855 million in extra assessments. Those amount to more taxes on health insurance plans, increased sales tax on hospital discharges and more shifting of general fund costs to the Insurance Department so that insurance companies pay for programs such as Timothy's Law, the mandated coverage of mental health treatments.

Further, the governor also will propose a new tax on some physician services to raise $50 million.

The bottom line will be a net increase in costs that ultimately get paid by subscribers, thereby increasing the cost of coverage at a time that most upstate insurers are struggling.
Perhaps a New Yorker or two will save this information and trot it out the next time we hear claims that it is the greedy insurance companies which are driving health care costs through the roof. What Gov. Patterson is proposing isn't new or unusual - it is what happens when government intrusion becomes widespread and is considered, by the entity with the monopoly on force, to be a higher priority to fund than those private citizens have.

And if you think there's a priority to cut spending, think again - Patterson apparently wants to make NY a welfare magnet state with those new tax dollars:
The Paterson administration also announced steps yesterday to expand the state's social services net, including a 30% increase in welfare payments over three years starting January 2010, increased money for food banks and expanded access to the state's Family Health Plus program.
That sort of nonsense will continue as long as the state can arbitrarily spend on whatever it chooses. That and being left to decide what the proper role of taxation is (in this case, "social change") and that virtually anything, for any reason, is taxable.

[HT: Claire]
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Previous Comments to this Post 

As a NY ex-pat, I have to say this is darn funny and absolutely predictable.

NY Pol: "Hmmmm, we’ve taxed our state so much that businesses are leaving for warmer and cheaper climes so our tax revenues are going down. What to do, what to do?"
Other NY Pol: "I know, raise taxes!"

First NY Pol: "Wait, we raised taxes and our revenues went down and now you want to raise taxes to get our revenues up? Brilliant!"

Written By: Veeshir
URL: http://
"...all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed."
Written By: josh b
URL: http://
unlike the Fed, states can’t just print money)
Well, they COULD print money, but I suspect they would get into a fair bit of trouble... :)
Written By: Scott Jacobs
URL: http://
Scott, that’s why the Constitution, Article I, Section 10, was written to state:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts..."

Under the original system of taxation, this was necessary so that a state couldn’t just print up new notes when it ponied up its share of the federal budget.
Written By: Perry Eidelbus
Don’t worry, Caroline Kennedy will save us.



Look at how well electing Senators who consistently vote for policies that send more tax money from our state to Washington than we get in return has worked. let’s just keep doing it, harder.

In all fairness to Patterson, he tried to restrain state spending, and got handed his rear by Sheldon Silver and the other guy who replaced Joe Bruno. Now he’s working on plan B, which is pure fantasy. The people don’t have the money to pony up for these taxes, and more companies are going to leave the state. Maybe we’ll get to the point where all of the jobs in the state are government jobs that pay well and have great retirement benefits.

Retire or get laid off, it’s Texas for me. The Supreme Court has already made two crucial rulings: NY cannot come after my 401K or pension when I establish residency elsewhere, and NY cannot mandate any sort of waiting period for their overly generous welfare benefits. If you believe actions have consequences, you know where that leads.
Written By: MarkD
URL: http://
In all fairness to Patterson, he tried to restrain state spending, and got handed his rear by Sheldon Silver and the other guy who replaced Joe Bruno. Now he’s working on plan B, which is pure fantasy. The people don’t have the money to pony up for these taxes, and more companies are going to leave the state. Maybe we’ll get to the point where all of the jobs in the state are government jobs that pay well and have great retirement benefits.
Hey, taxing itunes will save NY!
Retire or get laid off, it’s Texas for me
Maybe I’ll see you down there. In my mind, I’m just about out of here as well pending family obligations.

Written By: shark
URL: http://
a so-called obesity tax on non-diet soda to raise $404 million
Nevermind the fact that studies have shown that "diet" sodas cause more obesity than regular sodas. It has to do with the way our brains react to the false sweet taste - by telling the pancreas to flood the bloodstream with insulin, then getting confused when there are no sugars to bond to said insulin, then triggering hunger cravings. People who drink a lot of diet soda and then quit cold turkey often report dramatic weight loss - I quit a 4-5 Diet Coke per day habit and lost 15 pounds in 2 months.

Paying attention to the facts, however, would ruin a good chance for the nannies to feel good about themselves for creating a new "vice" to tax.

Stepping off soapbox now...
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