Tax em when they’re up, tax em when they’re down

When all else fails, tax em. Revenues for states and cities have been falling. Primarily the result of an economic crippling unemployment rate and partly the result of business frozen in its tracks from an overbearing and ever threatening Federal government.

So, what’s a state to do? Since most states can’t turn to higher income taxes (well they could but that’s a career killer right now) and they haven’t quite gotten around to taxing air yet, and there are only so many times you can turn to hunters, smokers and boozers to bail you out, the only solution is the sales tax. Yea! (H/T Instapundit)

While President Obama’s push to raise federal income taxes for the wealthy gets lots of attention, the continuing upward creep in the sales tax rates imposed by state and local governments has gotten less notice.

But Vertex Inc., which calculates sales tax for Internet sellers, reports that the average general sales tax rate nationwide reached 8.629% at the end of 2009, the highest since the Berwyn, Pa., company started tracking data in 1982. That was up a nickel on a taxable $100 purchase from a year earlier and up nearly 40 cents for the decade. The highest sales tax rate in the country now stands at 12%.

Ok, there’s something to be said for a “fair tax” where everyone has skin in the game. When everyone is touched, the touched touch back election time. But I am thinking this is a real deal killer for businesses hoping to recover from this recession, not that government considers the unintended consequences. Heh?

Right now Chicago has the highest big-city rate, 10.25%. But in a move forced by Cook County lawmakers, the rate is scheduled to drop on July 1 to 9.75%, matching that of Los Angeles. In New York City the total bite is 8.875%. Other high big-city rates include San FranciscoandSeattle(9.5%), New Orleans (9%), Houston,Dallas and Charlotte (8.25%), Las Vegas (8.1%) andPhiladelphia and Atlanta (8%)

Connecticut’s 6% looks like a bargain. The Tax Prof has some great comments on his blog. Lot’s of good analysis. Scroll down to read them.