The Most Expensive City will be Getting More Expensive as New York City raises Taxi and Limo Fares

Posted by PITHOCRATES - July 15th, 2012

Week in Review

One of the most expensive cities to live in just got more expensive.  Or will get more expensive this September (see Cost of riding New York City taxi to jump 17 percent by Joseph O’Leary posted 7/12/2012 on Reuters).

The New York City Taxi and Limousine Commission approved a 17 percent fare hike on Thursday, said Alan Fromberg, a spokesman for the commission. The change will take effect in September.

Gas prices are falling.  Because the economy is so bad.  Unemployment is stuck at 8.2%.  No one is spending money.  Few are packing the families into their cars for a long vacation.  As the rising food costs are taking a larger portion of family budgets.  One of the few areas improvements in productivity isn’t keeping inflation at bay.  Still, inflation is in the low single digits.  So with the horrible economic picture, the fall in gasoline prices and the relatively low inflation rate why are they raising fares by 17%?  For all of the above.

New York City is one of the highest tax locales in the country.  And when economic activity falls so does tax revenue.  The city is hemorrhaging money.  Because it’s a city dominated by public sector workers.  And public sector unions.  Who consume enormous amounts of tax revenue.  Raising taxi and limo fares raises taxi and limo company profits.  Which increases income tax revenue.  And it increases drivers’ incomes.  Which increases income tax revenue.  That is, as long as ridership doesn’t fall.  Which it may.  For this is yet one more reason not to go to New York City.  It’s just so costly to visit.  For once there you will be visiting the ATM early.  And often.  Especially if you travel by taxi.

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