Taxes could be raised on homes, cigarettes and local businesses after coronavirus crisis decimated gov budgets – The Sun
CITIES and states across the country looking to close the massive budget shortfalls created by the coronavirus pandemic are considering raising taxes on homes, cigarettes, local business and global tech giants.
The increases that have been proposed and in some cases adopted reflect the growing desperation on the part of government leaders, causing them to consider more harmful and economically risky moves in the middle of an economic crisis.
Mark Mazur, former Assistant Secretary for Tax Policy in the U.S. Department of Treasury spoke out on the proposed raisings, “No politician wants to lead with raising taxes,” he said.
“When they get there, it’s because they’ve run out of other options.”
As cities such as Florida, Texas and California struggle to control the resurgence of coronavirus cases in their cities, Philadelphia has increased fees on parking and raised wage taxes on workers who reside outside the city.
Chicago Mayor, Lori Lightfoot, said this month she couldn’t rule out a property tax increase to cover her city’s $700 million budget shortfall.
Other states and municipalities have considered a wide array of prospective rate hikes in response major drops in once-reliable sources of income and months of failed attempts to get Congress to authorize more federal aid.
In June, Nashville leaders increased property taxes by about 34 percent, a move meant to help pay down public education costs and one that quickly sparked a public outcry.
The coronavirus pandemic has left many cities and states slashing spending on public programs. They’ve put a stop to upgrading roadways, water systems and have laid off some of their own staff.
The deep cuts have contributed to a total of 1.5 million lost public-sector jobs since the start of the pandemic.
On the bright side, tax increases can help local governments offset the economic carnage caused by rampant unemployment and major slowdowns in shopping and tourism, but doing so is a risky proposition.
It could imperil the country’s economic recovery before it begins in earnest, economists say, leaving residents and businesses to foot a bill that they may not be able to afford.
In New York, more than 100 state assembly members and senators issues a joint public statement this month essentially calling on the state to tax higher-income earners to close the $17 billion budget deficit.
“We will not allow state budget cuts without raising revenue from those who can most afford to pay more,” lawmakers said.
Some New York legislators have set their sights specifically on tech giants such as Amazon, Facebook and Google.
President Trump has hinted that he supports the “generous” idea as senators say they are weighting up options for the latest round of financial relief.
The second round of checks is up for debate as part of a $3 trillion stimulus package.
Congress will likely make a decision before August 8, which is the last day the Senate is set to meet before taking a month-long recess until September 8.
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