The new year always holds promise. And for 2011, it’s the promise of higher taxes on your favorite gadgets.
If own an e-reader, watch cable, or use a cell phone (that covers just about everyone, don’t you think?) you’re in for tax increases instituted by your local government.
According to SmartMoney, state and county governments need this money to balance their budgets. Subtle taxes on what have become indispensable technologies are a great way to bring in more money, just as funds from the 2010 federal stimulus program run out.
Taxes Accompany Services
These taxes aren’t a one-time charge at the time of purchase. For example, a person who already owns an e-reader has to download books, and these books could be housed on a server in another state. The unsuspecting reader might then pay sales tax for both states. The taxes on cell phones—a way for local governments to replenish the money lost with the demise of land lines—apply to monthly service bills and can add up to as much as $500 during a standard two-year contract. When it comes to cable, the appeal is that most people already own it (27% more households than own high-speed internet), and that a tiny tax hike won’t be enough to spur them into canceling. Instead, they’ll just grumble and pay.
Put Your Money Where Your Heart Is
There is nothing we can do about taxes. The only control we have is over our base costs. Long-time readers know that we feel strongly about negotiating down our phone bill, about angling to rid ourselves of comprehensive, high-cost cable and about entertainment based on books that don’t cost $10 each. Of course, it’s all about distributing your money in ways that bring you the most joy—does cable do that for you?