The Beast Screams to Be Fed

It's easy to blame the current push for higher taxes on the Democrats. However, the disastrous state of public finances means the effort is truly a bipartisan affair. Indeed, given the damage caused during the past two years by the bursting housing bubble and the accompanying economic collapse, the writing was on the wall even before last November's elections brought the red team into power in Washington and elsewhere. I am on record as having said as much, when I told TV host Larry "the greatest story never told" Kudlow on air more than a year ago that it didn't matter who got elected -- taxes were headed higher.

I've also warned in my books and at Financial Armageddon that, eventually, there will be increasingly strident citizen revolts against efforts to feed the insatiable government beast. In the meanwhile, though, I expect desperate politicians will dream up all sorts of creative measures designed to keep the money flowing into government coffers as the downturn continues to take its toll on traditional revenue-generating mechanisms. In "Cities and States Plan Strange New Taxes on Pretty Much Everything," Fox News offers us a brief sample of what we can expect to see lots more of in the period ahead.

The government is having a hard time making do with the meager trillions you're throwing their way, so they're pressing some controversial new customs to buy their way out. Here's a look at some of the more egregious new taxes you're sure to be seeing soon.

Behold, America: the taxman cometh.

Even as taxpayers are struggling to make ends meet in a crumbling, tumbling economy, your friendly neighborhood (and state and federal) government is having a hard time making do with the meager trillions you're throwing its way, so it's relying on an old maxim:

If it exists, it can be taxed.

New York's resident grinch, Gov. David Paterson, tried suggesting a kind of omnibus fun-busting budget that would have taxed New Yorkers for skiing, golfing, camping, being fat, being skinny, going to the movies, going to plays, wearing clothing, going to strip clubs and having more than six fingers or toes. The governor, who is up for re-election next year, came to his senses about three weeks ago and renounced the budget, perhaps when an adviser noted that political contributions aren't tax-deductible.

Things haven't been all downhill for the taxman, though: some surprising new tariffs, like supersizing the tax on AIG bonuses, have had a measure of popular support, but most are being opposed hand and foot over wallet.

Cigarette taxes are jumping so much on April 1 that it will soon be cheaper to run a tobacco farm than to buy a pack of cigarettes. So as you stockpile your smokes for the coming decade, here's a look at some of the more egregious new taxes you'll be seeing soon.

IT'S ELECTRIC
Washington Mayor Adrian Fenty has proposed a slew of new taxes (for taxes are no longer solitary creatures like wolves, but herd together in dangerous slews) to meet his city's massive deficit. His first target: budget-busting street lights, which Washingtonians will now fund with an extra $51 monthly tax. Bottom line: if you expect to be kept safe from monsters lurking in the District night, it's really going to cost you.

DO THE MASH
Kentucky is called the state of the "unbridled spirit," but when a new 6 percent tax hike on booze goes into effect April 1, that slogan might have to change. Lawmakers are going to be taxing their very own Kentucky bourbon, which is, along with Col. Sanders and the Bowie knife, among the greatest contributions of the Bluegrass State. Talk about biting the hand that feeds you.

OLD PROFESSION, NEW FEE
Nevada's hidebound lawmakers are finally going after prostitution in their state. Well, not really ... but one Las Vegas Democrat has proposed a $5 surcharge on all, ummm, transactions, which he says will boost the state's economy by $2 million. While you finish doing the math on how many rendezvous there are annually in Nevada (answer: a lot), it's worth noting that most bordellos charge a minimum of about $100 to $200 for their services, and don't object much to the suggested tax. Five bucks is a paltry thing next to the prices some people are willing to pay in the Silver State.

GET IN AND STAY OUT
Nevada has also raised its so-called bed tax, which isn't nearly as fun as it sounds. Its 3 percent hike was levied in March on travelers spending the night in Nevada hotels, most of whom end up in Las Vegas. Nevada isn't alone: nearly half of states have a hotel tax meant to punish suckers foolish enough to leave their own homes, but as more sign on there's danger of an interstate tax war. Once everyone has imposed a stiff nightly rate, who will be safe from harm?

STRIPPED BARE
Texas led the way in 2007 by levying a $5 tax on patrons of gentlemen's clubs, exotic dance parlors and all other places where women disrobe for money. Now Florida and New York are among states considering their own "pole taxes," which have already netted the Lone Stars $11.2 million in revenues. The money was supposed to be used to fund sexual assault services (and no, the irony is not lost on anyone). Only hitch: a Texas judge ruled the tax an unconstitutional infringement of free speech. Yes, stripping is free speech. Let freedom ring.

CASH CROP
Billions of dollars in the hole, California's legislature is considering a blunt proposal from a San Francisco assemblyman: taxing legalized marijuana sales at $50 an ounce, a move its sponsor thinks could net the state about $1 billion a year. Oregon is considering a similar measure, taxing medical marijuana at nearly $100 an ounce. The taxes could really help excite the states' economies, even if everything else gets sluggish for a while.

RUNNING ON EMPTY
If you live in America and your name starts with a letter, you're probably going to be seeing higher gas taxes soon. States and municipalities from Massachusetts to Michigan are planning gas hikes to help rev up their stalling fiscal engines. So any of you planning to travel across state lines to stock up on cigarettes before April 1 had better get on the road fast, before new highway taxes, raised tolls, speeding cameras and apocalyptic moths bar your way for good.

PORNOGRAPHY!
A Washington state representative was beaten back in February when he suggested taxing pornographic materials to save programs that serve the poor and disabled. A noble gesture indeed, which would have taxed adult magazines, adult photographs, adult videos, adult phone services and a few things even adults wouldn't want to talk about. The flesh lobby (and the rep's fellow Democrats in the state house) stopped the bill in its tracks, a rare win for anti-tax forces this season. The ACLU opposed the bill, too, arguing that taxing pornography is a tax on free speech. So what happens if you put it on mute?

Comments

[Zach]

Well we need higher taxes, because we need better infrastructure, universal access to education, and universal health care.

With better infrastructure, especially a robust inter and intra city rail system, we could not only eliminate the need for a second car for your average middle class family (and their pocket book), but when combined with targeted density, you have less spawl and therefore less need to spend more $ building and maintaining every new mile of water, sewer, electricity, hospital service, fire service, police service, schools, etc.

With universal education, whether that be college or a trade school, you greatly enhance the value of the workforce and the national economy (not to mention millions of households would be able to re-direct money from student loan payments to big-ticket purchases, fueling the economy).

And of course universal healthcare is not only socially just, but will keep people out bankruptcy and lower the cost of employment.

So please, bring on the taxes. Don't wait another second. And make better use of what government already spends: way too much gets burned away through needless tax credits (just mandate they do it, only give a credit when it is economically justifiable) and other multi-billion dollar payoffs to business.

Case in point: you mentioned Washington State, where there was "a rare victory for anti-tax forces". Give me a break. We have a double-decker bridge being held together by clamps, and a bridge whose columns are slowly disintegrating from the inside. We need money for that. We have a budding rail system that is creeping forward on a snail's pace, because it relies soley on sales taxes and miniscule (historically) handouts from the federal government (even as China, Japan, and Europe sink tens of billions into massive rail projects). We have a state ferry system that is living on borrowed time.

The last thing we need up here is a tax revolt. We had that, year in and year out, all through the '90s. It devastated things...set us back decades. And still people whine. We don't even have an income tax (which is exactly why we do have a B&O tax, and probably why our sales tax is fairly high).

I want more government, and I want better government, and I'm willing to pay more taxes for it. And if we did that, and if we used it to build a society around a strong middle class, than the current economic situation wouldn't be as tenuous.

[Frito]

Zach, dude you are killing me, you are so full of crap. If you want to live France or Georgia, planes are flying there everyday. Adios and don't let the door hit you on the way out.

[dave]

you shoulda done an april fools, like economy fine, I found out I was totally wrong. too bad...

[Gerald]

Zach, I used to be a big Democrat till I realized it doesn't matter how much the government gets it will never ever be enough. There is more than enough money collected to do all the things a responsible government should be doing.

I have finally come to the conclusion a few years back that the only way to fix any of this is to have the whole system collaspe and start new. I have many friends that work in health care and believe me the only way to fix it is to let the thing collapse on itself.

[jogleaso]

Zach said:We have a budding rail system that is creeping forward on a snail's pace, because it relies soley on sales taxes and miniscule (historically) handouts from the federal government

Hey Zach, Why am I paying for your fucking rail system. And why do you think your bridges are in the shape that they are in? Probably because your wonderful government low balled the first job or took a payout from their buddies. Please take the first ship out to France.

[garberpog]

I agree about the need for taxes to maintain civilization. My problem is the way the money is spent, often wastefully or corruptly (surely some examples come to mind).

But the greatest outrage I feel is over the gargantuan waste of 8 years' spending on 2 gratuitous, pointless wars, and the bottomless pit called "rebuilding" Iraq & Afgan. Which has amounted to rebuilding over and over and over again as the ungrateful natives burn, steal and blow up everything.

Hello? Let's GET OUT, GO HOME, and start rebuilding here, without the extra costs of shell shocked and damaged vets.

[weinerdog43]

jogleaso, not all of us as fortunate as you to live out yonder behind the feedlot, next to the manure spreader and kittycorner to the rendering plant.

Oh, and a good bath will get rid of the hog smell dontcha know.

[Erich Riesenberg]

I am surprised anyone is ___ enough to blame one party or the other for the deficit. Both parties are happy to spend whatever they can borrow, the difference is how it is spent. Hoever, Obama is maintaing the same bailout of big banks started by Bush. Americans are not willing to do what it takes to hold politicians responsible, and that is true of most people everywhere.

[roger]

Amazing how many people have not read or respect the 1st. Amendment. Seems like there is quiet a few little Neo Nazy walking around or maybe they are just brainless little twits

[Zach]

Someone asked "why should I pay for your rail system?". Assuming this person lives outside of the Puget Sound area, and is obliquely referring to revenue sharing at the federal level, my response would be this:

In any rail project planned for a metro area, there is a certain economic benefit expected upon completion (for example: targeted upzoning around a rail station attracts new business and residential units to an area, and increases the # of customers to existing local businesses), and there is an economic cost to the impact area during the construction phase (as existing customers are driven away by road closures, re-routes, slow-downs, etc.). If the federal government contributes a low share of the project cost because of an ideological predisposition against government, then the project likely takes longer, which means that to local businesses, the cost was higher and the benefits lower (or at least delayed).

Moreover, in the absence of federal funding, the local taxation district would either have to raise local taxes higher (with higher local impacts), or they would have to borrow more, which means a large portion of the project cost goes to financing costs, i.e, to a bank instead of to local residents and the businesses they own and patronage.

Lastly, rail and other infrastructure projects are rarely funded by the private sector, but rely on a robust, consistent, reliable revenue stream from the public sector. Once that funding is put in place for a project, than a whole industry ecosystem emerges, as companies respond to the need for rail, rail cars, rail equipment, tunneling, bridges, etc. etc. If that funding remains robust across projects and regions, then you have a vibrant industry that produces jobs all along its supply chain. If you remove that funding, or make it ad-hoc, then that industry has to constantly revive itself, and never has a chance to achieve efficiencies or innovation. Every learning curve requires some amount of time. In essence, the less money we spend, the more expensive these projects become.

[ddd]

Zach,

Your explanation doesn't directly answer the question. What you said applies to countless things in an out of government everywhere. I would like to see an abundant industry grow up around chess and hot yoga. The issues are more along the lines of why should taxpayers throughout the US or in one state support one thing as opposed to another? There are, after all, unlimited wants or needs.