State Tax Shifts for 2012

With the beginning of every New Year, there are changes in the laws of each state, including changes in taxes. Some states are looking to increase taxes, some are looking to lower them, and this is in a broad range of taxes, including sales taxes, excise taxes, and income taxes, both on the personal and corporate levels. Other states, such as Connecticut and California are looking to increase income taxes. What makes these tax changes extra interesting is due to the fact that they are occurring in an election year. The republicans are looking to take over the Executive branch of the government, and will point towards the lowered taxes in certain states as backing their economic programs. On the other hand, the Democratic Party will point towards the tax raisings to back them up. In the current uncertain economic climate, no one can be sure of what effect any of these changes in taxation will have on the U.S. economy. Lowered income taxes for individuals could bolster the economy more, but there can be no guarantee. I think this is because of the way the individual spender. For example, in Massachusetts, the personal income tax is going to decrease from 5.30% to 5.25%. This decrease of 0.05% is seen as incredibly minor to most normal individuals, especially those who have no background in economics. To them, this might be seen just some way of the government trying to gain some more approval from the citizens. Since they see this change as quite marginal, it probably will not cause any real increase in spending.

The new taxes that could help bolster the current economic state are some of the new excise taxes being introduced throughout the country. These excise taxes are mostly focused around tobacco and alcohol, which are goods that tend to see high demand no matter the price or taxation on them. Some states are hoping to combine these excise taxes with increases in legalized gambling and casinos. Casinos make significant amounts of money off of alcohol as well as their gambling revenues, so if the states increase alcohol taxes, and see success in organized gambling, the economic benefits could be doubly helpful for the states.

Source: http://money.cnn.com/2011/12/21/news/economy/state_taxes_2012/index.htm?iid=SF_PF_River

Supply, Demand, and the Super Bowl

The Super Bowl has become one of the most prominent annual events in the United States in the past few years. What was once just a championship game for a popular sport league has expanded into a extravagant holiday rivaling some of the biggest holidays of the year in its excess. The Super Bowl, despite being just a one day event, is able to drive up the equilibrium points in several of its markets quite dramatically. The most commonly known version of this is in advertisements. For a company to manage to obtain commercial time during the super bowl costs companies millions upon millions of dollars, for just thirty seconds. The Supply is incredibly limited, but the Demand is dramatically increased during the super bowl, causing the point of equilibrium to gain in price, but stay the same in quantity.

Advertisements aren’t the only place where demand increases dramatically. Memorabilia for both teams in the Super Bowl will be very high in the weeks leading up to the super bowl. Normally, the NFL will have its producers churning out as much supply as possible to meet the very high demand, but this year, the NFL is facing an issue. The NFL has had a contract with Reebok to be the producer of replica jerseys, but the contract ends this year, and Nike will take over production. This is causing Reebok to limit production, because they don’t want to end up with excess supply that the NFL may not sell because the contract is over. This is causing an issue, because Reebok won’t produce jerseys for players they don’t have confidence they will be able to sell off. The Biggest names are still being produced to meet demand, but some other names that are currently in high demand are not being produced at a supply to meet demand. This is causing a radical shift in the supply demand framework, because supply is shifting inward because of the producer’s actions, while demand is shifting outward because of the consumer’s currents tastes. What makes this different though is there is no real change in price of the product. The producer isn’t going to sell them for a higher price, because the NFL wouldn’t allow them, because it makes them look bad. If the products are being sold secondhand, the prices will probably be getting higher.

Source:

http://money.cnn.com/2012/01/26/news/companies/giants_patriots_nfl_jerseys/index.htm?iid=SF_BN_River