Financial Methods

The New York Kitty Tax

Despite ending the year with a $1.5 billion surplus, Albany is considering what could come to be known as the Paw and Claw Tax, a 3% sales tax on pet food and pet supplies.

New Yorkers already pay the highest taxes in the nation, so it's not surprising that someone in Albany would suggest that pets shoulder some of the burden. The author of the bill, however, says the tax is aimed at helping pets. ¹

By 'helping pets', State Senator Frank Padavan means that funds collected by the new tax would assist animal shelters and wildlife programs.

The senator's logic is questionable.  Taxes influence behavior.  Raising the costs to pet owners will make pet ownership in New York more expensive.  Thus, state residents will adopt fewer pets. 

This will likely raise the number of animals in animal shelters.  Then those who run animal shelters will probably approach the good senator for more funding. 

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Source:

1. Jacob Gershman. Albany Eyes a New Tax — on Pets .
New York Sun. April 20, 2007.
http://www.nysun.com/article/52861

© 2007 Michael Cale

California Overtakes Hawaii for Highest Gasoline Prices

California leads the nation with gas at $3.27. Hawaii is now second with an average price of $2.98. In fact, the top five are all western states. Nevada, Washington and Oregon follow the Aloha State. ¹

The national average retail price is $2.71 as of April 2.

State tax on gasoline is higher in California than in Hawaii.  California imposes an 18 cents per gallon tax versus Hawaii's 16 cents per gallon tax.  This is over and above the 18.4 cents per gallon tax imposed by the federal government.²

The sales tax in California is higher, 6% versus the 4% rate in Hawaii.   In addition, California charges sales tax on the selling price (which includes the per-gallon excise tax).  Double taxation, anyone? Hawaii, however, excludes the excise taxes when calculating the sales tax. ²

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Source:

1. KHNL. Gas Prices High, Price Gouging Bill Stalls.
April 4, 2007.
http://www.khnl.com/Global/story.asp?S=6327882

2. Federal Highway Administration. Monthly Motor Fuel Reported By State.
March 9, 2007.
http://www.fhwa.dot.gov/ohim/mmfr/sep06.pdf (pdf link)

© 2007 Michael Cale