Business

Bloomberg To Cut $1B From NYC Budget

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Some tough cuts and tax increases are coming to The Big Apple.

From WCBSTV.com:

“This is a very tough time for our city and nation,” Bloomberg said. “We have a $4 billion budget gap. It is serious, I think it is manageable.” […]

For now, Bloomberg is proposing $894 million in new sales taxes, including:

-Increasing the sales tax by one quarter of one percent from 8.375 percent to 8.625 percent
-Repealing the sales tax exemption on clothing purchases under $110
-And new taxes on lots of things that are now tax-free, like music downloads. […]

“I would love to not have any sales tax, it’s not good for business here,” he said.

That’s the mayor’s plan for now, except even he admits it might not be his plan in the end. If the Legislature decides to put a surcharge on the personal income tax for taxpayers who make over $500,000, he told CBS 2’s Marcia Kramer he might piggyback on that.

“We’d have to find a billion dollars more revenue,” he said.

This is obviously risky business. Increasing taxes during a deep recession isn’t necessarily a good strategy because it depresses consumption and makes people save.

But then again, we’re talking about Bloomberg, one of the most successful business men in the world. If he thinks this is the way to go, we may want to pay attention.

More as it develops…