Thursday, April 09, 2009

More States Look to Raise Taxes   [Veronique de Rugy]

I wrote here and here about the multiple tax increases faced by taxpayers in New York State. Well, soon they will be able to commiserate with taxpayers in many other states who are facing the same fate.  

According to this morning's Wall Street Journal:

At least 10 states are considering some kind of major increase in sales or income taxes: Arizona, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Washington and Wisconsin. California and New York lawmakers already have agreed on multibillion-dollar tax increases that went into effect earlier this year.

As the Journal rightfully notes:

Raising taxes is a perilous proposition for lawmakers, who must balance their states' budgets every year. Not only do they face political heat for increasing financial burdens during the recession, but added taxes risk worsening their states' economic problems by, for example, further hobbling consumer spending.

And yet they will do it anyway. Never mind that the reason these states are in the red has more to do with massive spending than revenue shortfalls. For a good article on how governors increase spending during booms and tax away during bust, and how history seems to repeat itself over and over again, read Cato Institute Chris Edwards article here. Also, for data on local and state government spending since 2000, check out Figure 1 of Chris’s Tax and Budget Bulletin called "10 Reasons to Oppose a Stimulus Package for the States."

Read the Journal story here.

04/09 10:23 AMShare