Thursday, January 20, 2011

Taking the No-Taxes Pledge b/w Looking for an Opening



On Monday, January, 17 the New York Times published this "cavalry-is-coming!" analysis of new governors' inauguration addresses. Budget Worries Push Governors to Same Mind-Set.

Excerpt: The dismal fiscal situation in many states is forcing governors, despite their party affiliation, toward a consensus on what medicine is needed going forward.

The prescription? Slash spending. Avoid tax increases. Tear up regulations that might drive away business and jobs. Shrink government, even if that means tackling the thorny issues of public employees and their pensions.


Three days later, we have this.  (And it's a take-your-pick headline option, folks!)

Apparently, it was a short-lived mind-set.  Not everyone accepted the power of the mind meld.

Raise Taxes? Some States See the Value. (Print)

Higher Taxes Wouldn’t End Some Deficits. (Online)

Excerpt: For other states, though, such a tax increase would go much further in addressing at least the short-term problems. In Arizona, for instance, legislators during the last 17 years repeatedly cut income taxes, opening an annual hole of nearly $2 billion. That sum, according to Mark Muro, a senior fellow at the Brookings Institution, approximates the size of the state’s annual deficit without taking into account the recession-driven drop in revenue.

Matthew N. Murray, a professor at the University of Tennessee, Knoxville, who has studied state fiscal problems for the Brookings Institution, said: “In Illinois, the stark reality of the cataclysmic nature of their budget reality drove this income tax increase. But we’re going to see more states raising taxes over the course of the next few years largely because there’s only so much cutting you can do.

“It’s getting to be a cold winter out there.”

The Tax Foundation, no friend of tax increases, noted recently that many states face gaping revenue shortfalls and forecast that “2011 may be a year of dramatic tax increases
.”

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