President Obama’s fiscal year 2015 budget proposes to increase taxes on individuals by over $820 billion and on businesses by about $500 billion, for a total of over $1.3 trillion in new taxes over the next ten years....
- State Budget Shortfalls Present a Tax Reform Opportunity
State Budget Shortfalls Present a Tax Reform Opportunity
Special Report No. 164
• Forty-five states face budget shortfalls of varying degrees, totaling approximately $132 billion through fiscal year 2010. However, every state but one expects revenues in 2010 to be higher than in 2006, and all but nine states have seen revenues grow faster than inflation from fiscal years 2006 to 2009.
• States hit hardest are those that relied most heavily on growth in unstable revenue sources like taxes on capital gains, high-income earners, and corporate profits.
• Punitive taxes on unpopular groups, such as smokers, drinkers, or high-income earners, are poor tax policy and a source of instability because they force a small group of people to pay for government services broadly available to all citizens. Shifting the burden of paying for these programs away from most taxpayers can result in demands for more government than people are actually willing to pay for.
• State and local officials are more frequently using the "Washington Monument" ploy-threatening to cut politically popular services to create pressure for tax increases.
• Broadening tax bases, lowering rates, and eliminating targeted tax credits can generate extra revenue without unduly harming a state's economic performance.
Note: This is not the most recent version of this publication. See the 2014 Index here.
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Tax Foundation Fiscal Fact No. 283
On September 8th, 2011, President Obama proposed the $447 billion American Jobs Act (AJA) to a joint session of Congress. The AJA includes more than...
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