The new proposal of New York Governor, David Paterson, for the state budget comes as a disappointment to most of the luxury good buyers. He proposed a $21.1 billion budget, thus increasing 5% sales tax on luxury goods that cost above $20,000 which would also include Jewelry.

The purchases of aircraft's which costs more than $500,000; yachts that cost $200,000 or even cars that cost $60,000 would be highly effected and the sales would go down. The proposal comes about to fill the $ 15.4 billion deficit over two years which does not only include a tax increase, but also involves job layoffs and reduction in school aids. This is in effect for 2009-2010 fiscal year budget.

On one hand where we see the increase in taxes, the other side also sees that sales tax has been exempted on clothing and footwear that cost less than $110. This comes as a good Christmas news for the general public. In addition to this, there will also be a twice a year tax holiday during which any clothing or footwear under the cost $500 would not be subjected to sales tax.

Paterson remarked in his morning presentation "In his inaugural address, President Franklin Roosevelt told a nation in the grips of the Great Depression that now is 'the time to speak the truth, the whole truth, frankly and boldly,'"Today, we, too, cannot shrink from the challenges ahead". He said this budget presentation is in view to deal with the historical financial crisis of New york.