Are Your Ready To Get Backdoored?

Hi Everyone,

Here in New York State, Governor Cuomo, signed a law that was suppose to cap taxes at a maximum of 2% each year for both property and school taxes. Of course there are municipalities and school boards that blatantly go over the tax cap, as per the written media. But today's blog isn't about what happens to the municipalities or school boards that go over the tax cap or even the ones that either stay at or below the tax cap. Today's blog is about a blatant taxing entity that is trying a new and more sinister method of raising taxes above the 2% tax cap; but still have their records reflect that they stayed at or below the maximum cap.

How is this possible? How can you raise taxes above 2% and have the "books" legally show that they didn't? That means that the taxing entities found a way around the tax cap. Well the Westchester county, city of Rye  school board is thinking about enacting a 3% tax on utility bills to pay for their increased education costs. Believe it or not, this tax would be applied to all electricity, natural gas and telephone services. What a backdoor kick in the butt to each and every taxpayer.

What is even more astonishing is that the city of Rye is not the first municipality or school board to do this. Other Westchester County municipalities that already have utility taxes are: White Plains, New Rochelle, Peekskill and Mount Vernon and in addition, Rockland County even has a county wide 4% tax. If utilities rates are taxed at a fixed rate of 3 or 4% which was approved by some board, that tax increase was not approved by a majority of the voters. So would that mean that voters would only be allowed to vote on the original up to 2% increase as required by law? It certainly seems to be that way. That would mean that the taxing entities couldn't care less about whether their budget votes passed or not. The taxing entity boards would then be able, when needed to make up the difference, to increase the utility taxes without it being voted on. Where will this end and at what cost to the taxpayers? This utility tax makes no sense and to top it off, it might bring the feeling of entitlement and consequently mismanagement. 

Now to pour a whole lot of salt on the wounds of these poor taxpayers, they would also not be able to deduct their utility taxes on their tax returns, which eventually could be a sizeable amount.

Hopefully these backdoor taxes will be repealed, sooner rather than later.

Til next week.

Peter

Stealing Legally

Hi Everyone,

I was reading the newspaper a few weeks ago and again I found an article that blew me away.  Highway robbery is a very mild analogy to what I found out. Pew Charitable Trusts did some new research and wrote a report regarding the nation's highest interest rates for payday loans. Keep in mind, that payday loans are used a lot by low income wage earners who desperately need a small loan, when unexpected expenses occur, i.e. car repair bills. So that is why I was blown away by the interest rates that are charged.

So if you were to guess how high you think these payday interest rates can get, what would be your guess? Hold onto to you hats. Somehow all of these rates are legal. The state with the highest rate is Idaho with a rate of 582%! Yes you read that correctly, 582%. South Dakota and Wisconsin are tied in second place with 574%. Then comes Nevada, 521%, Delaware, 517% and Utah, 474%. Some other states that have the lowest of the high interest rates are: Maine, 217%, Oregon, 156% and Colorado at 129%. Fifteen states either ban payday loans or cap interest rates at 36%. Without a limit on interest rates, competition among lenders does not tend to lower rates much, according to Pew's new research.

Now I understand that these loans are made without collateral, other then having a weekly paycheck, to people who most likely don't have anywhere near a good credit score. So the people who need these loans the most, due to their financial circumstances, will always pay the highest interest rates. I am not sure how many of these loans go unpaid, but rates up to 582% seems very unreasonably high, grossly unfair and seems to me to be a legal form of stealing from people and a bonanza to the lenders. But somehow the rates are legit and people continue to use these payday loans.

Til next week.

Peter