Jan 7, 2011

The Taxman Cometh

States have been feeling the pinch from unemployment causing them medicaid outlay increases and tax income decreases, and the budgets are being squeezed. Rather than rein in spending as we are forced to do, states are looking for ways to increase current or make new taxes.

Cell Phone charges
are up up 2% in 2010 over 2009. The tax hikes, which could amount to as much as 75% in some localities next year. On average, 15% of a monthly cell phone service bill is already made up of taxes and fees, compared to 7% for most other goods and services

E-book charges could start to be taxed not just by the state you live in, but also by the state where the server that you're downloading from is located. A buyer living in New Jersey who purchases a $10 e-book housed on a server in Texas might pay $1.52 in taxes (7% sales tax in N.J.; 8.25% in Texas). Taxes could add up to 21% of the total price, assuming multiple states apply taxes to the same transaction.

Cable Bills have already seen increases, such as Denton, Texas, where the city council voted to increase the public-access television fee (which pays for public, education and government channels) from 50 cents each month to 1% of the subscriber's bill. At an average cable bill of $75 per month, it goes to 75 cents from 50 cents.