Quinn Proposes Suspending City Sales Tax
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The speaker of the City Council, Christine Quinn proposed that New York City suspend sales taxes for an entire week as soon as rebate checks begin arriving from the federal government’s economic stimulus package.
The move, she said in her State of the City speech today, would further boost the city’s economy, which has shown some of the same slowing trends that have been seen nationally.
The economic aid plan that Congress passed last week will send cash rebates to more than 130 million people. Checks will start arriving in mailboxes in May, ranging from between $300 and $1,200; households with children get an additional $300 a child.
Ms. Quinn said she plans to send a bill to the state Legislature, which would need to approve the tax cut, to suspend the 8% sales tax on all retail goods and entertainment for an entire week.
“We have every reason to believe that this 8% solution, given its timing, will be even more successful at priming the consumer pump,” she said.
For several years, the city promoted special weeks where it suspended a portion of the sales tax on clothes and shoes; that occasional benefit was recently made permanent, and there is now no city sales tax — equal to about 4% — on those goods.
The federal tax relief is intended to breathe life into the economy, although there are mixed opinions over how much benefit it will actually achieve. Some say consumers with debt will use the money to pay bills rather than spend the cash, as intended.
An Associated Press-Ipsos poll found that only 19% of those surveyed said they would spend their rebate checks; 45% said they would pay off bills, while 32% said they planned to invest the money.
Ms. Quinn’s proposal did not have the immediate backing of Mayor Bloomberg’s administration.
Mr. Bloomberg last month proposed a pared-down budget plan that demands cutbacks from all city agencies, and already includes some tax cuts for New Yorkers.
A deputy mayor, Ed Skyler, said today that budget negotiations between the mayor and the City Council will consider a number of proposals, but stressed that the administration’s tax cut priority is the $1 billion package that Mr. Bloomberg already proposed.
