In an effort to tackle New York’s nearly US$15 billion budget deficit, Governor David Paterson has proposed taxing downloads of software, music and other content, including pornography.
This proposal comes at a time when the economy is in freefall and the so-called “stimulus” package is going to cost taxpayers much more than they expect. Gov. Paterson seems unaware that his tax proposal will have the same effect.
Just after President Barack Obama signed the mammoth stimulus package into law Tuesday, Wall Street tanked, with the Dow Jones industrials average closing less than a point above its lowest level in five-and-a-half years. This show of despair over the federal government’s big spending plans is no surprise, given that the only way to pay for the stimulus is through greater debt.
According to the Pacific Research Institute’s Jason Clemens and Adam Frey, the $787 billion dollar package will actually grow to at least $1.34 trillion over the next 10 years, due to the fact that the government will need to borrow money not only to cover the stimulus, but also the interest on that debt.
That means taxes are going to go up, and New York’s additional proposals to tax the technology sector will be a true anti-stimulus. They will not only create a disincentive to buy, but also push businesses to relocate and thus destroy jobs in New York — for years one of the unfriendliest states to private enterprise, consumer choice and the Internet.
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