Watch Out! Here Comes the Tax Man
The hit to the economy is not just paper losses. We're losing real jobs. The jobless rate is at a 16 year high and climbing:
The US has been rocked by the fastest weekly rise in unemployment in 16 years.
New claims filed for unemployment insurance zoomed last week to 542,000, the highest since the summer of 1992, when the nation was recovering from a recession, the Labor Department said.
The latest news on the crucial jobs market was worse than analysts expected. Meanwhile the numbers continuing to draw jobless benefits climbed to more than four million, the highest in just over a quarter-century.
So, what's next? Well, it looks like the tax man is coming. Yeah, you're probably thinking. We all know that. The tax man is coming to tax the rich. Uh, think again. The tax man is coming for everyone [cue ominous music] - the rich, the tired, the poor, our huddled masses are all about to be taxed a little more:
Since the study findings were released last fall, education advocates have been pushing for use of the new formula. Despite approval from the state House last winter, a measure on the funding formula died in a Senate committee.
The biggest problem was where to get the additional money. Now advocates think they've found a solution.
Bud Mulcock, with the New Mexico Coalition of School Administrators, said a 1 percent increase in the state's gross receipts tax could raise between $470 million and $475 million.
He suggested money raised from a tax increase be dedicated to schools and not directed to the state's general fund. That would ensure the money goes to education and would also be a selling point to the public, he said.
That money, Mulcock said, not only would pay to implement the funding formula, but also would ensure no cuts are necessary for the following year. "It's a bold stroke," he said, "but I think it's a time for bold strokes."
Yup, no doubt about it. During the toughest economic times to hit our country in a quarter century, increasing gross taxes on everybody in New Mexico by over 15% is definitely a bold move. Before you start leaving me nasty comments that the proposed tax increase is only one percent, remember that adding a percentage point to a tax in the five to seven percent range is a huge tax increase. And, it is going to hit the poorest amongst us the hardest.
Mark my words, this is only one of many new taxes which will be pushed. In addition to the tax and fee increases we'll see being pushed statewide, you are going to have regional (think rail runner and spaceport) and municipal tax increases to cover the budget shortfalls from the spending spree of prvious years.