Posted on 12/24/2008 3:18:19 PM PST by reaganaut1
Governors from Tennessee to Idaho have ordered deep cuts in spending as the recession continues to ravage state budgets.
Can broad-based tax increases be far behind?
State fiscal experts say the stage could be set for a wave of rises in state sales and personal-income taxes more widespread than any since the early 1990s.
"My view is that cuts will become significant and touch enough people that tax increases will be more viable than they have been in the past," says Scott Pattison, executive director of the National Association of State Budget Officers in Washington.
Taxpayers in most states escaped major tax increases after the 2001 recession for a couple of reasons, says Donald Boyd, a senior fellow at the State University of New York's Rockefeller Institute of Government. Many states fell back on large tobacco settlements to help them through the downturn. And that recession was much briefer than this one is projected to be. "The fiscal impact on states was severe and short," says Mr. Boyd. "This one looks to be every bit as steep and longer."
But governors aren't rushing out with proposals to boost personal income taxes just yet. There's a bit of a dance that has to happen first, as legislatures digest the opening bid from governor's mansions and all the various sacred cows that are passing under the ax.
California, mired in a fiscal crisis of historic proportions, is the exception. A three-quarters percentage point sales-tax increase is on the table there, plus a 2.5% surcharge on 2009 personal income taxes.
(Excerpt) Read more at online.wsj.com ...
Or.....governments could simply learn how to do their jobs.
If my governor, Mark Sanford can hold the line on taxes, S.C. will be among the first to snap back from the recession and he’ll be a hero. Sadly, some folks around here are already calling him stupid because he’s voicing opposition to raising taxes....so you know he’s a true conservative.
We’ll know they’re making their move when Texas proposes cancelling high school football.
Typically, while the “big” taxes, such as income tax, are clearly controlled by the Laffer Curve, less analysis is given to State and local taxes and how they affect behavior.
Registration and professional licensing fees will only rise until those affected vigorously lobby to protect themselves. This is direct pressure to State legislators and local politicians, and they tend to be very responsive to it—or else.
Property taxes usually have a significant lag behind recessions, because it is difficult to value real estate when existing home sales are in the dumps. This keeps those taxes higher than they should be.
Sales taxes are the most regressive of taxes. They also vary considerably between goods, such as automobiles and food.
More viable for whom? This guy is nuts. Raising taxes during rising unemployment and declining property values will not raise more revenue. How about reducting spending and the size of government?
“My view is that cuts will become significant and touch enough people that tax increases will be more viable than they have been in the past,”
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More and more of my friends in California are ready for battle and are wishing for a total financial meltdown here. Most of us have had it with our cowards in the legislature. The only thing that’ll move them is to simply run out of money and let the chips fall. We should be talking about closing schools, hospitals, 3 and 4 day state employee workweeks and job cuts in the 20% range. Instead our legislature won’t budge from spending as usual and expanding programs and spending on new ones. It’s utter madness. These clowns need to be shocked into reality.
Tax increases will stimulate the state economies.
-Winston Churchill
How so? What does the state produce?
Exactly. Just wait until the public employee retirement systems (PERS) start going belly up.
That is the other shoe about to drop on the economy.
It’s sarcasm.
On the other hand, I’ve heard, endlessly, that raising taxes is the answer to these kind of problems, so................
The accounting for these state and municipal funds are required to be disclosed by law.
When it hits the fan, there are going to be a lot of stinky legislators and bureaucrats.
The other shoe will drop soon on the economy.
DON'T SCARE ME LIKE THAT!
LOL!
I propose raising licensing fees for lawyers by 10,000%.
That will fix everything.
Chuckle!
Merry Christmas.
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