For the average person, inflation is usually understood as an increase in the price of goods and services over a certain period. But this also causes a loss in purchasing power. To calculate the inflation rate, the average price increase for services as well as a basket of goods is considered for a year. A low inflation rate indicates a slow decrease in the price of goods, whilst a high inflation rate is a quicker price increase. The inflation indexes most frequently used are the Wholesale Price Index as well as the Consumer Price Index.
A brief evaluation of the concept of inflation in the NYC context
The root of inflation can be understood as an increase in the money supply. This plays out through various mechanisms within the economy. There are various ways in which a country’s monetary authority can increase its money supply:
- Devaluing legal tender currency.
- New money is loaned into existence as reserve account credits. This is done through the banking system. Government bonds are purchased from the banks on the secondary market.
- Printing more money and giving it away to the citizens of the country.
Other matters that can cause inflation are a shortage of certain goods, which can lead to a price increase, or supply bottlenecks. The consequence of inflation is that the purchasing power of money is lost. This occurrence can run throughout the entire economy and occur within any sector. Inflation specifically works to measure the impact of price changes are for a diversified set of services and products.
Inflation and how it affects the citizens of New York
According to the New York City Department of Taxation and Revenue, the first-ever inflation refund checks will be issued soon. The aim of these one-time payments is to provide a measure of relief to residents who have been paying an increased amount of sales taxes caused by inflation. Payments will be made automatically and sent out to eligible individuals. Payment distribution will commence from mid-October 2025.
Payments will be cascaded across multiple weeks. No specific delivery schedule is available, and payment dates are also not based on the region or zip code in which the individual resides. Eligible candidates are those who, during 2023:
- Were not claimed as dependents on someone else’s tax return.
- Filed the New York State Resident Income Tax Return (Form IT-201).
- Reported income that fell within the specific qualifying thresholds.
Promoting a very noble idea
According to Governor Kathy Hochul’s official statement, the inflation refund checks will aim to put more money into the pockets of New Yorkers. These checks, with a value of up to $400, will be sent out to approximately 8.2 million households throughout the state. Check distribution will be done by mail and will circulate from October to November. This initiative was secured by Governor Hochul during the FY2026 State Budget.
A further initiative encompassed within the State Budget was an expansion of the New York Child Tax Credit up to the value of $1,000 per child, a cut in taxes for the middle class to its lowest levels in 70 years, and universal free school meals. The free school meals alone will help to save families an amount of around $1,600 per child. All of these matters aim to help the people of New York.
Governor Hochul has come to the table and strengthened her commitment to help the families in New York survive the rising cost of living. She further kept her promises to cut taxes for those middle-class individuals, ensure that all students receive a free school meal, and expand the child tax credit. This will make a big difference in the lives of the residents of this state, specifically the working individuals and families. These initiatives implemented by the Governor have been positively received by everyone.