Are you ready for the iPod tax?

Thu Dec 18, 2008 1:01PM EST

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The next big casualty in our current recessionary era is the good old state budget. Many states (including my own California) have been fiscally reckless for years, overspending ruthlessly and then trying to figure out how to make up the budget shortfalls after the fact -- and generally failing at it -- just like the federal government. Now, with sales, property, and income taxes rapidly shrinking, things are looking extremely dire as state coffers are quickly emptying out.

Case in point: The state of New York, which now faces a $15.4 billion shortfall between revenues and proposed spending -- the collapse of Wall Street (and the loss of the taxes it once generated) has hit New York especially hard. The result? Lots of budget cuts, and tons of new fees and taxes, including a new tax on the sale of digitally downloaded music and movies, per a budget proposal from Governor David Paterson.

Pundits have already dubbed it the "iPod tax" (though, oddly, it does not actually create new taxes on iPod hardware or other gadgets -- perhaps "iTunes tax" would be a better moniker). According to the proposal, new taxes would also be levied on everything from movie tickets to taxi rides to massage services.

New York has been anxious to get its tax hooks into the Internet for some time now. This summer it finally enacted a law that forces out-of-state companies to collect taxes on Internet sales to New York residents. Amazon promptly sued. That case is still pending.

Paterson's budget proposal now goes to lawmakers for approval. Any New Yorkers out there care to weigh in on the issue? No one likes new taxes, I know, but are things getting truly dire to the point where drastic measures are required?

Comments on Are you ready for the iPod tax?

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  • 26 Posted by rassmussmi on Thu Sep 3, 2009 8:29PM EDT Report Abuse

    This smacks of the dreaded "stamp tax" that fueled the American revolution. Where is Samuel Adams when you need him? (yeah, yeah .. I know ... making beer these days ..) Maybe we should dress like indians, march to Boston Harbor and throw our iPods into the harbor.

  • 27 Posted by rtrapasso on Thu Sep 3, 2009 8:55PM EDT Report Abuse

    If we're going to talk politics... For the record, we didn't elect Paterson to the seat he's in now. (No, I didn't vote for Spitzer.) This guy's a disaster. I've yet to see whether Obama's the same kind of disaster; it seems he may not be. If he is, he's certainly not getting my vote in four years. (Come on, now - McCain? I had no choice there...)

  • 29 Posted by mazdaspdracer on Thu Sep 3, 2009 7:12PM EDT Report Abuse

    It is a fact that democrats usually believe in raising taxes. Of course they cover their behinds by saying, "we only want to tax the wealthiest Americans" which is just silly since they are the wealthiest Americans. They will not tax themselves. Your right Jetski Obama has nothing to do with the tax rates in each state, however, his agenda will be to increase taxes to fund more liberal programs such as universal health care. States such as NY and California who are overwhelmingly democrats will follow suit and therefore set precedent.

  • 30 Posted by oaklandchefsanders2003 on Thu Sep 3, 2009 7:43PM EDT Report Abuse

    Perhaps Rankel Should give up 3 of his four luxury vehicles purcheased at tax pyers expense, or maybe give up 3 of his four houses, again purchased with tax payers money! beside, if you tax our liesure, we won't have a way to soothe or beasts and perhaps those beasts will get loose and take back their world!

  • 31 Posted by notsurewhy27 on Thu Sep 3, 2009 7:41PM EDT Report Abuse

    What do you say about all of this? I agree with the fact that the regular joe is fee'd and taxed to death....When will it end....probably never since it isn't regular joe's in power. I think it will never change until there are some average everyday people in congress and senate but that is probably just a pipe dream. I think everything is just getting too BIG and just like a bubble blowing up its bound to pop sooner or later and with most people spending beyond their means there is going to be a whole new can of worms being opened up...........

  • 32 Posted by mehwishghs03 on Thu Sep 3, 2009 7:15PM EDT Report Abuse

    New Yorker here. WHat can I say....im becoming immune to the pain....lol.

  • 33 Posted by willewings3 on Thu Sep 3, 2009 10:46PM EDT Report Abuse

    guess what?! as a new yorker, if they do this, I'm going to frostwire and cabos, limewire alternatives! And Paterson can kiss my fat ass! If he can find it, he's so blind. I can't believe he took offense to SNL! It's true! Screw Paterson! Screw Obama! I'm sick of it! Recession! Call it what it really is -- A depression! God, I am just so freakin mad at this idiot Paterson

  • 34 Posted by maleman14001 on Thu Sep 3, 2009 7:04PM EDT Report Abuse

    If you think the IPod tax is crazy then wait until you start paying the obesity tax for sugar sodain New York.($0.26 per gallon)

  • 35 Posted by omgllamaattack on Thu Sep 3, 2009 7:45PM EDT Report Abuse

    A better drastic measure: Stop the stupid spending. Stop paying these morons 100,000+ to sit in an office figuring out the best ways to benefit themselves and their friends. Stop the pointless war. Stop the multi-billion dollar bail-outs to companies that don't deserve it.

  • 36 Posted by sfholiday on Thu Sep 3, 2009 9:14PM EDT Report Abuse

    Good post, Chris. I'm glad to see this being discussed in the tech pages. Two points: In general, sales tax is considered regressive, impacting poorer folks at a larger percentage than the wealthier. And not everyone who consumes tech is wealthy. Repealing the tax breaks given to the wealthy over the past decade or so would generate massive revenue. We all need to push Obama and Congress to do that before adding any new taxes, regardless of what the media tell us. Point two: Our real spending problem is excessive military spending, which dwarfs all other spending in this country. Let's go after that with a red pen before we go after some high school kid who's trying to make a music collection.

  • 37 Posted by wrongwaydianne on Thu Sep 3, 2009 10:51PM EDT Report Abuse

    The "powers that be" will never realize enough is enough. Here in NY, we are already taxed at the highest rate in the US. Now they want to tax what little enjoyment we have. It stinks to high heaven. When are they going to close the borders of the US so we don't have to support every illegal alien and there so called "citizen" children. Why do you think NY needs all the revenue? Medicaid. Get these parasites back to their own countries and live within our means. Enough political correctness with all the bleeding hearts. I for one am danged sick of it.

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