watch
As many have noticed, unemployment, falling wages, reduced consumer purchases, along with lower house values have caused a big dent in government tax income. However, it appears no government was prepared for the reduced receipts. No vote conscious politico wants to reduce payroll, pensions, parks or perks. Tightening the belt is perceived as bad politics, especially pro-active belt tightening.
What to do now? Battle the collective entitlement mentality of the unions, government employees, campaign contributors, welfare recipients and voters by instituting serious cutbacks? May not have a choice but to do some cutbacks. To be sure, the politicos will prefer to raise taxes to the maximum extent possible, as to mitigate the cutbacks in their vote-buying expenditures.
Raising sales tax won't do the job, since people are continuing a trend of spending less. Increase income tax? That would work for state govs and the few localities that have an income tax. Just really sock it to those who are still employed.
But what about the majority of localities that depend on property tax? Since people are not spending, let's tax assets. Once someone is established in a house, they will hardly move out because of a grand or two of increased house tax. Raise the property tax on cars and boats as well. Just keep the pain right under the threshold that would cause one to leave. Savings accounts are an asset, also. Won't spend, eh? They can just tax you on a percentage of your yearly average savings account balance.
Look to see very high property taxes on home purchased, say, after 2008. This targeted tax can be justified by claiming such buyers need to pay "their fair share" since they vultured a "windfall" after buying homes at such a "discount." In reality, increasing property tax is about the only tapable resource left.
If they start taxing my savings account (beyond the tax I already pay on the paltry interest generated from that account) for just sitting there... ugh.