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Old 02-05-2010, 08:06 PM   #14
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Default Re: Cities and States Plan Strange New Taxes on Pretty Much Everything

8 Sneaky Ways to Raise Taxes

Rick Newman, On Tuesday February 2, 2010
US News

If you're hoping that tax hikes on the rich will solve America's debt crisis, you're overestimating the power of the wealthy.


Politicians, of course, don't want to admit that most of their constituents face a stinging tax hike. And until there's no other choice, they'll try to raise funds without having to mouth the "T" word. As federal, state, and local governments get desperate, here are some of the mechanisms elected officials will try to use to raise funds without getting run out of office:

1. Expansion of existing taxes. Raising income tax rates is so unpopular that most politicians consider it a last resort. Raising state and local sales taxes is a bit more tolerable, and it's even better if you're simply expanding a tax that already exists. "In many states, the first thing they'll do is squeeze more out of the taxes they've got," says Alex Meleney of Deloitte Tax. Some states, for example, could expand sales taxes to things not already covered, such as restaurant meals, salons, business services, Internet connections, and phone or cable TV service. It also makes sense to crack down on those evading existing taxes, by increasing the fines for late payments and underpayments and conducting more inspections to catch merchants and others who may be skirting their obligations.
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