Is New York Governor Andrew Cuomo seriously considering a “congestion tax” that would both commercial and non-commercial vehicles with a hefty toll for simply driving in midtown Manhattan?
The New York Times says yes, and offers us details.
Excerpted from Jim Dwyer and Winny Hu’s article:
Driving a car into the busiest parts of Manhattan could cost $11.52 under a major proposal prepared for Gov. Andrew M. Cuomo that would make New York the first city in the United States with a pay-to-drive plan.
Trucks would pay $25.34, and taxis and for-hire vehicles could see surcharges of $2 to $5 per ride. The pricing zone would cover Manhattan south of 60th Street. In a key change from past efforts, drivers would not have to pay if they entered Manhattan by all but two of the city-owned East River bridges, which are now free to cross, as long as they bypassed the congestion zone.
What a great idea, Governor!!! Right up there with the surcharge on “sugary drinks” that Chicago implemented last year….and then rescinded two months later because purchasers were fleeing the city in droves to buy their Coke, Pepsi, 7-Up, Gagorade, etc. in its suburbs….and then buying the rest of their groceries there as well (why make two trips?)
Elsewhere in the Times article it is mentioned that an estimated $1.5 billion dollars in revenue will be gained by this shake-down. But what it doesn’t estimate is how much other revenue will be lost.
The Chicago example should give you significant insight. But if that’s not persuasive enough, read this excerpt from Aaron Elstein’s article for crainsnewyork.com, which details NYC’s experience in overtaxing cigarettes and liquor:
Anytime you order a cocktail or buy a bottle of liquor in New York, there’s a one in four chance that the booze has been smuggled in from out of state. If you buy a pack of smokes, there’s a roughly 50% chance that the cigarettes are bootlegged too. And it’s only getting worse.
Illegal smuggling deprives New York state of at least $1.6 billion in annual tax revenue, and the enterprise has grown exponentially since the city and state quadrupled tobacco taxes between 2001 and 2011. As nationwide liquor sales have jumped 106% since 2000, according to the Distilled Spirits Council of the United States, the state’s tax revenues on hard alcohol have risen by only 50%—without any significant changes in the tax rates. Those numbers suggest liquor bootlegging has cost New York about $1 billion in lost taxes in the past 15 years.
Prosecutors bring charges almost every week against smugglers who sneak in carloads of cigarettes, typically from Virginia, where state taxes are just 30 cents per pack, the second-lowest rate in the nation. New York levies $4.35, the highest in the country.
Now, think about what a $12 tax for simply driving in midtown will do to the retail businesses there. The restaurants. The entertainment venues. The taxi fares. The tourist bus industry. Etc. etc. etc. etc. etc.
Deduct that from the dream-world estimate of $1.5 billion and see what you wind up with.
I am hopeful that this exercise in clown-college economics is quickly dispatched by the New York State legislature. Given that it is controlled by Republicans, I’d say the chances are excellent.
But if it passes and becomes law? Then they will deserve what they don’t get.
It occurred to me the other day that even at $14 a pack, a cigarette costs seventy cents each for several minutes of pleasure. Guys like me who enjoy target shooting often pay a dollar or more for a single rifle bullet that is GONE in the snap of your fingers!
Yes, yes. It will cost you more to get into NYC for shopping, restaurants, theater and such.
Taking it one step further, these establishments must pay for DELIVERY of the goods and fixtures. Food, theater props and equipment, merchandise, etc. THOSE costs will go up, in order to cover the additional congestion/shakedown charges.
Why not send out armed tax collectors with clubs and knock everyone the encounter and take there bill fold?