Wednesday, August 05, 2009

Cooking Books, Government Style (Emeril Would be Envious)

The Rockfeller Institute of Government came to the conclusion that state tax collections had the largest drop in over 45 years in first calendar quarter of 2009 (1CQ09) and that 2CQ09 looked to be even rougher for states. This has created a cumulative deficit of over $142 billion in 48 states (if memory is correct; your state is in deficit unless winter temperatures commonly hit -40 (either C or F)--think Alaska and North Dakota). Nor are all cold-weather states spared--Connecticut, New Jersey, New York and Vermont join Arizona, California, Florida, Louisiana and Nevada has having deficits in excess of 20%. California is only the most famous of states practicing tax gimmickery (hope Moody's and S&P are taking note)--including asset leasing, IOUs, tax amnesties and expanding service and Internet taxation. Increased tax penalties and stricter rules on tax deductibility are also used in some states.

In my previous post, I pointed out that increasing taxes has not been a winning strategy at the national level. Though my paycheck comes from a state government, I believe that it is in my best long-term interest to have a tax strategy that has long-term viability and respect from the taxpaying public rather than gimmicks and tax increases that give tea party participants easy targets for criticism.


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9:41 PM  

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