RSS Feeds Facebook Facebook Twitter Twitter
Frontpage | About | Contact | Subscribe

Odd Taxes Throughout America

Everyone hates additional taxes. But as things stand right now, it seems inevitable that Americans might need to shell out more of their earnings to the government. Right now, there are all sorts of taxes that are being passed by various states. Some have targeted fur jackets while others have slapped duties on blueberries. Certain factions even want illegal drugs to be legalized because it will provide additional revenue for the government. Below are other more mundane taxes you can expect:

Expensive Haircuts – the next time you visit the barber in Nebraska and Michigan, you might need to spend more than usual. These two states want to extend sales tax into personal grooming services to improve their balance sheet. Personal grooming is considered as a “luxury item”. So while you might not look at it as such, the government thinks you can actually do it at home.

A Tax on Humor – call it silly but Maine lawmakers are proposing a 5% state tax on clowns, jugglers, petting zoos, comedians, and ventriloquists. As it stands right now, they even want to earn a bit more money from hay rides and paintball. Some people are making fun of it is serious business for people within the industry. Magicians, for example, hate the idea. They think it will have a severe impact on this niche business. The bill will go into effect in January 2011.

More Taxes on Fun – according to Representative Jim Wayne of Kentucky, “High income folks are not paying their fair share.” That may be true in some instances but observes are scratching their heads about how he’s pushing for equity. Among other things, the southern state is tax hot air balloon rides, limousine services, golf green fees, and private landscaping. They expect to raise $350 to $400 million a year from this initiative. Critics are worried that it might cripple small businesses that actually provide these services.

Levy on Pets – pet grooming services is targeted by lawmakers in Maine. But aside from this, they will also put a levy of a wide range of services including diaper services, bowling, massage, movie tickets, pest control, zoos, and beauty parlors. While this is expected to raise a substantial amount for the state, small businesses can expect to bear the brunt of the burden.

Retail Sales Up in April 2010 – Consumer Confidence Up

Consumer confidence is up. The month of April has been good for retailer signally seven consecutive months of growth. This shows a broadening of the economic recovery. Previously, only the manufacturing sector experienced some level of growth. While it only improved by an average of 0.2 percent, its mere improvement is enough to assure most investors and economists that a solid economic recovery is on its way.

Payroll has seen its biggest increase in four years. Employers are also becoming certain that sales will continue to grow. In turn, this level of confidence will improve customer spending further and employees can even expect higher wages. Electronic stores have done particularly well for the month of April especially because Apple Inc. has launched a highly popular ebook reader – the iPad.

Dean Maki of Barclays Capital based in New York said that, “Retail sales are picking up because of income growth…consumption s going to be a growing at a firm pace through the end of the year.” The economy is experiencing sustainable recovery that can improve all other sectors.

Government Rebates Do Help

The stimulus package last year, to some extent, helped propel the sales of electronics and appliance in April. For example, around two-thirds of the $300 million allotment for rebates (on energy efficient appliances) was released last month. In Florida, the state ran out of rebate funds in three days as customers trooped to the retail stores. In Illinois in Texas, the allotment ran out in a day.

Beyond government rebates though, Americans are starting to spend reason for the simple reason that the outlook is brightening. In April, the Labor Department said that 290,000 jobs were created. This is certainly a positive development for everyone concerned. The key is for the labor market to recover as quickly as possible for growth to the sustained. It will also help stabilize equity and home prices.

Graduates Struggling to Repay College Debt Burden

At first glance, a college degree may seem like a good investment for your future. Indeed, studies suggest that higher education enables individuals to significantly improve their earning capacity. But the question is, how far does it go in providing good value for money? In recent years, some graduates have come to the conclusion that a college degree is not worth the time, effort, and resources you put into it.

Graduates of for-profit universities have found that their debt load makes it impossible for them to earn a decent living. Around 53% of these graduates carry around $30,500 or more when they leave the university. Meanwhile, 24% of students from private nonprofit schools and 12% of those from public colleges carry similar debt loads.

As if their debt problems aren’t enough, it is compounded by the tough job market. The graduates of 2008 faced a job market in ruins after the financial crisis and recession. At this point, their main concern isn’t how they can repay their loans but if they can even get a job at all. According to Sandy Baum and Patricia Steele of the College Board, “Too many students are borrowing more than they are likely to be able to manage.”

The study from College Board also revealed that, in terms of numbers, blacks are most likely to borrow; 27% have a debt of $30,500 up. Among the whites, the figure stands at 16% while it is at 14% for Hispanics. Asians tend to borrow least as only 9% of them have this burden.

Given this figure, financial policies need to be strengthened to let students borrow only what they can realistically repay. In addition, it is important to help students become financially literate before they undertake any borrowing for postsecondary education. Their expectations should be based more on facts, not just hope.

More Irresistible Credit Card Perks – But You Actually Pay for Them

As banks gear up for a tougher year ahead, they are making credit card deals more irresistible for consumers. In general, this is in reaction to stricter lending laws that make it more difficult for firms to profit from gullible and debt-laden clients. Some card issuers actually offer free travel vouchers, access to airport lounges, and the option to transfer reward points to other hotel and airline loyalty programs. Meanwhile, several issuers doubled and even tripled the points you can get for purchases.

At first glance, these perks may appear free or complimentary. But as always, you should expect to ultimately pay for them. Banks used to profit mainly from the interest rates charged to consumers. These days, more revenue will be derived from merchant charges and annual fees that were historically kept at a low range.

Robert Hammer who runs an advisory firm based in Thousand Oaks, California estimates that fees range from $75 to $495 compared to its range of $20 to $40 (1995-2005). Take the example of Barclay’s PLC, its Visa Black “carbon card” has an annual fee of $495 though it comes with a 24-hr concierge service.

These developments are not always bad for consumers. A lot depends on their buying cycles, purchasing pattern, and their lifestyle. Value also depends greatly on perception. For instance, a customer who loves to travel will definitely look more favorably on air miles compared to a rebate feature. In general though, credit card experts will advise you to avoid reward cards since it typically has higher interest rates.

If you can pay off your debt before its due date then you can benefit great. Otherwise, the finance charge and interest you need to pay will outweigh the retail value of the “reward” you get. Not all banks are joining the bandwagon. Charles Schwab Corp. has discontinued its First Invest Credit Card which provided 2% cash back to new clients. Expect this to be more of an exception than the rule. Most issuers are ramping up their marketing campaign in order to attract loyalty and more customers.

Subscribe to CLB Posts

Stay up-to-date on Financial news, articles, and announcements:

Spread the Word

Credit Card Widget