Wednesday, February 24, 2010

States Seek Stiff Tax Hikes

A combination of a shaky economy, fiscal mismanagement (mostly in the form of excessive entitlements), unfunded federal mandates and balanced budget laws (with no capacity to print money to "solve" their problems) have many states seeking greater revenues. California is the well-known example of an economic mess, but other Western states, such as Arizona and Oklahoma, are also hemorraging tax revenue. Nervous legislators in Arizona, Georgia, Illinois and Washington State and Arizona are considering significant tax increases while North Carolina has found some success with tighter corporate tax enforcement.

I will acknowledge that the Laffer curve is less likely to apply to state taxation compared to federal taxation; nevertheless, the legislators in question had best hope (without much reason to believe this) that TEA party participants are so distracted by Washington, DCs shenanigans that they would ignore a closer-to-home source of tax increases. There is already talk of sizable changes in the federal legislative bodies this fall--and little reason to believe that state legislatures passing sizable increased taxes are any less suspectible to being "voted out."


Blogger Orphe said...

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8:38 AM  

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