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In New York, not all bagels are equal

Published 9:49am Thursday, August 25, 2011

There is a joke back home about those who leave New York to live in the southern states.

We call them New York state tax refugees.

In the past few years, according to The Tax Foundation, New York has ranked among the top states with the highest tax burden in the nation. In 2008, the state ranked number three in the nation with a state and local tax burden of $6,419 per capita. North Carolina, for comparison, ranks 28 on that 2008 list with $3,663 per capita.

With some of the highest taxes in the nation, it’s understandable why New Yorkers flee their home state.

Legislators in New York are already infamous for Pigovian taxes. Cigarette smokers in New York pay approximately $10 or more for a pack.

To avoid the special taxes on cigarettes, many smokers frequent smoke shops located in various Native American tribal lands in upstate New York where state taxes are not levied. Of course, this hasn’t stopped officials from trying to collect the taxes from the tribes, which has now erupted into a court case.

What pushes the tax matter over the edge is that New York state representatives continue to support seemingly mindless taxes to help fund the cash-strapped state coffers.

One of the most recent is being dubbed the bagel tax.

If you’re from any place in New York, chances are you were brought up on bagels. A bagel with a “schmear” of cream cheese is probably one of the most popular breakfast or lunch foods for a New Yorker.

Last year, a franchisee of Bruegger’s Bagels, a popular bagel chain in upstate New York, was informed he owed the state three years on back taxes for bagels that were sold and not taxed.

The bagel store apparently did not charge sales tax to any bagel prepared in the store, be it by slicing, topping with cream cheese or butter or just eaten on the premises. Most counties in New York have an eight percent sales tax.

Unbeknownst to most citizens and businesses in New York, the tax has been on the books since 1965, but because the state has increased audits in order to find more revenue the bagel provision is suddenly rearing its head.

I guess desperate times call for desperate measures in a recession and it seems to give some the power to kick their constituents while they are already down.

Maybe New York’s new state motto should be: “The land where not all bagels are treated equal.”

Amanda VanDerBroek is a staff writer for the Roanoke-Chowan News-Herald. For comments and column suggestions email: amanda.vanderbroek@r-cnews.com or call (252) 332-7209.

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