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The Almighty Buck Government News

New York State Budget Relies On Entertainment Tax 655

Posted by CmdrTaco
from the i-thought-mass-would-do-it-first dept.
einer writes "Facing a budget shortfall, New York State Governor David Paterson crafts a budget that taxes iPod music downloads and other 'digitally delivered entertainment services.' On the chopping block is $700 million in school aid and $3.5 billion in health care subsidies."
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New York State Budget Relies On Entertainment Tax

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  • by eldavojohn (898314) * <eldavojohn.gmail@com> on Wednesday December 17, 2008 @11:18AM (#26145441) Journal
    Simple solution if you think this is unjust highway robbery targeting the technically gifted: Find a friend or family living in a different state and get their address. Call your credit card company and add their name and address to a billable location for your credit card. Then when you set up your credit card information on iTunes or Amazon or whatever, list their address as the billing address. They can't apply the tax even if you are downloading in NY.
    • by FooAtWFU (699187) on Wednesday December 17, 2008 @11:21AM (#26145473) Homepage
      Simple solution if you don't have someone to do this to: Head over and shop music the old-fashioned way, in New Jersey.
      • by aesiamun (862627) on Wednesday December 17, 2008 @11:26AM (#26145543) Homepage Journal

        Did you forget that an entire state is attached to that hole they call New York City? Some of us live in the middle of the state...with NY State already taxing Amazon purchases, the drop of education money and the 18% tax on non diet soda, I have a feeling NY doesn't want people living here anymore. :(

        • by MightyYar (622222) on Wednesday December 17, 2008 @11:38AM (#26145757)

          They'll be losing me next year! Honestly, why do people stay in this high-tax state? I lived in PA before and the state took 3% income tax. That's an ADJACENT STATE! NY takes 7%, for reference... New Jersey has this radically progressive tax schedule where the poor pay 8x less than the rich, so it's difficult to compare with New York.

          To be fair, sales tax is lower by 2%. Of course I live in the city, so pay an additional 3 or 4% income tax and 4% sales tax - but the situation was similar in Philly.

    • Re: (Score:3, Informative)

      by Red Flayer (890720)
      Hmm... have you tried this?

      First, sales tax is assessed based on delivery address, not billing address. This may be hard for NY to deal with, since online delivery means they'll need to map IP address (or customer account) to physical address.

      Second, by doing that, you're committing tax evasion. You are responsible for use tax on those items you use that are taxable where you use them, but you bought them where they were untaxed, or taxed at a lower rate. Sure, this is often overlooked, and states (and
      • by scubamage (727538) on Wednesday December 17, 2008 @12:46PM (#26146999)
        Further I think this opens up another issue... those who pirate materials could be tried for tax evasion. Exactly how they nailed Al Capone. They couldn't get him on other things, but they could get him on that. I was always under the impression that taxes are paid based on the geographic location of the point of sale.
    • Re: (Score:3, Insightful)

      by rwven (663186)

      Or you could just buy some itunes giftcards which have song credits.

  • Sleazy (Score:5, Insightful)

    by qoncept (599709) on Wednesday December 17, 2008 @11:18AM (#26145447) Homepage
    "Let's propose tax cuts where it'll hurt em so they'll favor our new tax."
  • On the positive side (Score:3, Informative)

    by truthsearch (249536) on Wednesday December 17, 2008 @11:22AM (#26145481) Homepage Journal

    Well, on the up side he's trying to raise more money through products rather than income taxes. I'd prefer the taxes on ipods, cigars, gasoline, and luxury cars to income tax increases. Of course if it hurts NY businesses (I don't think it will), then it'll hurt in the long run. But the state needs to stop bleeding money immediately.

    • Re: (Score:2, Interesting)

      by Fastfwd (44389)

      Why not use income taxes for services that apply to everyone like education and health?

      I agree that other things like road maintenance should be taxed on products like gas.

      I am Canadian so taxing the income is just normal to me.

    • by larry bagina (561269) on Wednesday December 17, 2008 @11:50AM (#26145951) Journal

      bleeding money. Interesting. Let's say you had a gaping leg wound that was bleeding, well, blood. For this analogy, assume you're a hemophiliac and the bleeding won't stop on it's own accord. Would you get some blood packs and inject them into your arm? No, you'd stop the bleeding (and inject blood if needed). Raising taxes doesn't stop the bleeding; cutting spending does.

  • Issues (Score:4, Insightful)

    by Antony-Kyre (807195) on Wednesday December 17, 2008 @11:23AM (#26145507)

    Rather than arguing for or against taxing non-tangible products, let me says this...

    How is New York's tax system done? Isn't it income tax, property tax, and some sort of sales tax?

    They have a sales tax, right? They're just extending it to non-tangible goods. How is downloaded music any different from buying a CD, in regards to taxes? Why shouldn't it be taxed?

    Taxi rides, movie tickets, cable and satellite TV, seem like a bad idea to be taxed. Taxi rides are a big part in living in the city, right? Movie tickets are expensive enough already, right? And, well, cable and satellite TV, what effect will that have on people voting for him next time around?

    • by Nom du Keyboard (633989) on Wednesday December 17, 2008 @11:34AM (#26145697)

      They have a sales tax, right? They're just extending it to non-tangible goods.

      It's more than that. Now Apple (although probably not Amazon since they maintain they have no presence in NY) will have to collect a special tax strictly for NY residents, and pay that tax regularly to the state, and maybe file additional reports at additional expense, and no longer have the nicely uniform 99 cents/download price/image - and that's the effect on just one company alone. Multiply this by every company affected in every new area and the burden is significant.

      Of course NY prides itself on being a very liberal state, and Joe Biden has said that paying taxes is a civil duty. Maybe they'll like having this happen to them. If not they can always vote some new people in - oh wait! The election is already over and you're stuck with these clowns for at least the next 2 years.

      (If you say why Apple? It's because there are Apple computer stores in NYC giving the state tax people something to get their claws into.)

      • Re: (Score:3, Insightful)

        by diskofish (1037768)

        Of course NYC prides itself on being a very liberal state, and Joe Biden has said that paying taxes is a civil duty.

        Fixed that for ya. Talk to anyone outside the NYC area and they'll agree that taxes are way too high. The worst part is that local tax monies are sucked up and re-distributed to NYC.

      • Re: (Score:3, Interesting)

        by camg188 (932324)
        "...will have to collect a special tax strictly for NY residents."
        Cell phone companies have had to deal with special local taxes for years. Any company that delivers products and has to collect sales tax has to deal with differences in local sales tax.

        The tax system in the US seems to be more about subterfuge and camouflage than any sound fiscal policy.
    • Re: (Score:3, Informative)

      by MightyYar (622222)

      How is downloaded music any different from buying a CD, in regards to taxes?

      It brings up issues of jurisdiction. If Apple's servers are in CA and the payment is processed in CA, and Apple's facilities are in CA, then how can NY tax them? It's similar to mail-order tax issues.

      By the way, I know this is theoretical, since Apple in fact has stores in NY. NY probably has every legal right to tax AAC downloads from Apple.

  • by rolfwind (528248) on Wednesday December 17, 2008 @11:25AM (#26145531)

    http://www.apttax.com/ [apttax.com]

    That is all. Oh, and it's time for all government to tighten its fat belt.

  • by brian0918 (638904) <brian0918@g m a i l .com> on Wednesday December 17, 2008 @11:26AM (#26145559)
    So the state is collapsing under its government's regulations, and the government's plan to solve the problem is to regulate further, driving more markets out of the region? Brilliant! Eventually they'll learn, or be forced to learn, that you can't have your cake and eat it too. They will have to downsize the state government and withdraw the regulations hindering the market, or they will see their economy disappear. One or the other will be the inevitable outcome.
    • by FatSean (18753) on Wednesday December 17, 2008 @11:42AM (#26145833) Homepage Journal

      Keep the health care budget intact, but close the bases and scale everything down. This will reduce the need to Federal Income Tax revenue.

      Then, let NY keep more than $0.66 of every dollar it contributes in Federal taxes.

      We need to cut costs, but at the top where the rich benefit from gov't spending the most.

    • by SirGarlon (845873) on Wednesday December 17, 2008 @12:27PM (#26146687)

      So the state is collapsing under its government's regulations

      Actually, the state is collapsing under a sudden, dramatic downturn in tax revenues because Wall Street firms are losing money all of sudden. Quoth TFA:

      "Maybe we should have thought about this when we were depending on what we thought was inexhaustive collections of taxes from Wall Street - and now those taxes have fallen off a cliff."

      Apparently the state of New York didn't build up any cash reserves/pay off debts when times were good.

      I don't see where regulation comes into it. It's not that I expect you to RTFA or anything, but it sure sounds like you're jumping to conclusions to fit your pet theory.

  • by Nom du Keyboard (633989) on Wednesday December 17, 2008 @11:27AM (#26145563)
    I would rather have less government for less money. Did you ever note that politicians always say they'll have to cut the most inflammatory items - police, fire, libraries - first? How about their own salaries next time for starters?
    • Re: (Score:3, Informative)

      by darkmeridian (119044)

      Policemen and firemen take up much more money in salaries and guaranteed retirement benefits than politicians, if only because there are so many more of the former group. Also, the result of cutting politicians' pay would be to make it so that only the rich and the corrupt can afford to be politicians.

  • by Capt James McCarthy (860294) on Wednesday December 17, 2008 @11:30AM (#26145637) Journal

    How the Government institutions tell folks that they should be more fiscally responsible while they run up more and more debt. I guess if I had a tax base, I wouldn't be concerned with how much I spent every year either.

  • by alta (1263) on Wednesday December 17, 2008 @11:30AM (#26145641) Homepage Journal

    Not with the taxing entertainment, but I'm really not too upset about that one. But the rest of the country needs to back off on the social programs. Schools, no. Trying to pay for EVERYTHING to make sure EVERY warm body (citizen or not) has the same benefits as everyone else just isn't sustainable. Go ahead, tax the rich. And, as in the case of NYC, they are moving out in droves. So that leaves you with masses of people dependant on welfare, and no more rich left to tax.

    California is going to be next here. They have a massive immigration issue. It's one thing to turn a blind eye (sanctuary cities anyone?) to the problem, Its another to try to feed, cloth, house, and healthcare every single person that shows up on your doorstep.

    As Spock said, "needs of the many outweigh the needs of the few." The many are the 300Million United States Citizens, the few are the 20M illegal immigrants

    • by jedrek (79264) on Wednesday December 17, 2008 @11:38AM (#26145751) Homepage

      You mean the illegal immigrants that pay all consumption, property and ownership taxes while not getting any of the direct benefits from them? The immigrants that are hired by US citizens? Yeah, they're the problem, not no-bid gov't contracts, spiraling health care costs, corporate subsidies (both industry and agricultural) along with two wars.

      • by Jhon (241832) on Wednesday December 17, 2008 @12:02PM (#26146183) Homepage Journal

        You mean the illegal immigrants who's kids suck up any and all tax money they may generate - and then some - the moment they enroll them in a public school? It costs ~$12k-$14k per kid. How many of these families generate enough income to cover just one kid? Not counting the other drains on social programs.

        So yeah... they are the problem. So are the other things you meantion. They are not mutually exclusive.

        • by characterZer0 (138196) on Wednesday December 17, 2008 @12:49PM (#26147049)

          I'd rather my taxes pay for the education of some kids from a hard working illegal immigrant family that values education than for the babysitting of some welfare babies that do not make any effort to learn.

      • Re: (Score:3, Interesting)

        by internerdj (1319281)
        Or, you know, corporate bailouts that dwarf years of spending on those things in the blink of an eye to save the jobs of people who make and lose more in a day than the majority of the country will see in a lifetime of working.
      • Re: (Score:3, Interesting)

        by alta (1263)

        The problem is, they're only paying consumption taxes.

        Being illegal, they aren't paying the income taxes.
        In almost all cases, they can't own land, so they can't pay property taxes.
        They aren't paying social security....

        Looking at my paystub,
        Fed Income Tax 154
        Social Security 143
        Medicare 33
        State Income Tax 108
        Health Insurance 326

        All of things put together are what I pay to the govermnet every month so my kids can go to school, I have paved roads to drive on, there are parks in my neighborhood and when I get ol

      • Re: (Score:3, Interesting)

        by nurb432 (527695)

        They get direct benefit.Everytime they drive their car across the street, or drink from public water supplies, or need assistance from a fireman or ambulance.

        All they don't get benefit from are things like social security.

  • No surprise. (Score:4, Interesting)

    by theaveng (1243528) on Wednesday December 17, 2008 @11:30AM (#26145645)

    Politicians will tax everything they can lay their hands on:

    - telephone
    - cellphone
    - cable
    - ISP
    - electricity/natural gas
    - gasoline/road tax
    - income tax
    - social security/medicare (levied on both citizens and businesses)
    - sales
    - excise/manufacturing tax
    - tariff/import tax

    It was obvious internet downloads would eventually get taxed too. The average American pays 40% of their income in taxes. The average European 65-70%.

  • by MarkWatson (189759) on Wednesday December 17, 2008 @11:33AM (#26145687) Homepage

    I have two good friends who are retired school psychologists from New York ad everytme I read about New York's financial problems, I think of them.

    Same thing in California: two relatives are teachers, and one is just about to retire on a teachers pension. I think that California is very close to bankruptcy.

    Pensions may sound good, but it may be that only federal government pensions may pay out because the federal government can print money ad pay out in highly devalued dollars).

  • Cut costs? (Score:5, Insightful)

    by oDDmON oUT (231200) on Wednesday December 17, 2008 @11:37AM (#26145749)

    I recently read that New York City's entitlements policy, bloated "public service" sector, fiscal irresponsibility and system of governance were key in bringing on the bankruptcy [nypost.com] of the 70s.

    Could this be a case of the tree not falling far from the apple?

    The remedies in the 70s included fiscal conservatism, cutting entitlements, dealing with corruption and going after crime.

    Rather than raising taxes to enable business-as-usual to continue unabated, maybe it's time state officials considered wielding the same scalpel used in the past to the body of the state today.

  • by Alzheimers (467217) on Wednesday December 17, 2008 @11:39AM (#26145775)

    I'd say that these tax proposals are extremely short-sighted and show that our (un-elected) Governor lacks a vision or direction, but I wouldn't want to offend anyone [news10now.com]

  • by Anonymous Coward

    Take Massachusetts. They had a chance to get rid of the state income tax. They voted agianst it by a 70-30 margin. State unions and pensions that go with it are out of control. the roads and bridges despite all the taxes are crap. I believe its 80% of highway funds go to administrative costs vs 20% goes into fixing the roads. Oh and for that they get a hole in the ground that was so shodily made its killed people, and it only cost them billions to build.

    It seems all the gov run agencys are bankrupt y

  • by guruevi (827432) <evi@smoking c u be.be> on Wednesday December 17, 2008 @12:00PM (#26146163) Homepage

    NYS has been driving out businesses just by their costs and taxes. You pay taxes for everything and every piece of paper (permit, license, ...) from the government costs at least $10 for individuals, $100 for businesses. It's so bad that you can live in NYC but any decent company (datacenters. stocks and banking) is right outside the border in NJ. The same goes for Buffalo: it used to be a big business city; they all moved to Erie, PA or Canada and now that city is as good as dead. If you look at the border-towns (eg. PA-border) the NY-side of the border has the smallest population, no businesses except for a bar and no real-estate market (people dump it way below market value). On the other side of the border (the PA-side) there is a decent sized rural town, the shopping mall and stores like Wal-Mart are literally 1/2 mile away from the border, clearly built at a location to draw out the NYS folk.

    • Re: (Score:3, Informative)

      by Xtravar (725372)

      This is exactly what I learned 12 years (or more?) ago when I played Sim City for the first time.

      Maybe we should get these politicians a copy so they can see what happens when you jack up taxes - abandoned warehouses, skyscrapers, and houses. Whoops!

  • New York Taxes (Score:3, Insightful)

    by ticklemeozmo (595926) <justin.j.novack @ a c m.org> on Wednesday December 17, 2008 @12:06PM (#26146283) Homepage Journal
    I assumed their city was completely running off of Parking/Traffic Enforcement, and that everything else was just to pay off the corruption.

    Try parking legally in New York City. Am I right people?
  • by kenp2002 (545495) on Wednesday December 17, 2008 @12:23PM (#26146593) Homepage Journal

    Consitiutional Amendments
    "No governement agency at the federal, state, or local level shall spend in excess of the previous 3 years average of income from taxes and fees collected except through a voter approved bonding" (Prevent Overspending)

    "No person shall have their property tax increased beyond 3% in any calendar year, nor increased greater then 100% since the time of purchase or transfer of ownership of their primary residence by any goverment agency." (Prevent trying to steal and redistributed land through taxing people out of their homes)

    "A person shall be secure in their private property and eminent domain shall be restricted for use solely for the appropriation for government owned and operated use and may not be transfered to private ownership."
    (Clean up 'public use' for land stealing)

    "No company shall be tax on profits in excess of 5% of net revenue by the federal government and taxed no more then 15% when combined with local and state taxes." (Limit corporate income tax, so states at most can tax corporate income at 10%)

    "The pay of corporate officers of a publically traded company shall be a scale of the median salary paid by the company to it's employees and contractors and may not exceed 10 times the median salary of the company in salary and no more then 20 times the median salary in stock compensation at the time of aquisition of those stock options." (If the typical employee makes $40,000 a year then the CEO can never make more then $400,000 in a salary and cannot receive more then $800,000 is stock in a year. If they want a raise, most employees must get a raise also)

    "The term of any senate or house member shall be limited to 2 terms"

    Those would go a long way.

  • by bleh-of-the-huns (17740) on Wednesday December 17, 2008 @12:26PM (#26146671)

    Movie tickets, taxi rides, soda, beer, wine, cigars and massages would be taxed under Paterson's proposal. It also extends sales taxes to cable and satellite TV services and removes the tax exemption for clothes costing less than $110...reinstating the sales tax on clothing and shoes will drive people to New Jersey, where they will also gas up their cars and pick up their wine, spirits and soda because the prices are less due to lower taxes.

    Seriously.. taxing clothes under $110..... First off, I think they should tax the hell out of anyone who wants to spend $100 or more per item (obviously some larger items can be excluded) but don't tax the guy spending $20 on a pair of jeans from walmart. Tax those who can afford the 100+ pair of jeans...

    And as for TV.. well, I know its not a necessity, but it does keep people occupied, and we are already unfee fee'd to death there, adding another tax, well then they better start making the cable/sat companies remove some of those unfee's that they have been milking for years.....

    Or even better, the gov should make those unfee fee's actual gov taxers and use that money, the telco's/cable/sat/cell providers are not actually using the money for anything that they are supposed to (that $1 charge for number portability that was supposed to be temporary and go away after they recouped their costs to implement the infrastructure.... has long long since been done, and now the money is basically profit...)..

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