New York, NY —

City Council members are criticizing Mayor Bloomberg's proposal to raise the sales tax rate by a half-percent and eliminate the tax exemption for clothes and shoes. At a Council hearing yesterday, Finance committee chair David Weprin said the proposal would cost 1,200 jobs, mostly in retail.

WEPRIN: When we eliminated the sales tax on clothing and shoes, they figured it'll be an increase in jobs. It's logic to presume a decrease in jobs if the reverse happens.

REPORTER: In 2005, the city got rid of the sales tax on clothes and shoes that cost less than $110. Combined with state taxes, the effective new rate of taxation would be close to nine percent on most purchases in the city.