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Wyden-Gregg, Illinois Taxes, and Amazon Tax in Connecticut

1 min readBy: Joseph Bishop-Henchman

Some interesting reading from today:

Curtis Dubay at the Heritage Foundation writes that the proposed Wyden-Gregg taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. reform is a good first step to fundamental tax reform. The summary:

While imperfect, the Wyden-Gregg tax reform proposal is a serious bipartisan effort to make the U.S. tax code simpler and less obstructive to economic growth. Congress should seriously consider it, and make improvements as outlined briefly [in this report], while relieving all Americans of a gigantic government-imposed headache.

Josh Barro at the Manhattan Institute writes in Real Clear Politics to explain in depth why Illinois is in such a budgetary mess. An excerpt:

The Land of Lincoln has not truly balanced its budget since 2001, and its large structural deficit has it poised for fiscal ruin in the recessionA recession is a significant and sustained decline in the economy. Typically, a recession lasts longer than six months, but recovery from a recession can take a few years. . While other states can blame external economic factors, the key cause of Illinois’ budget crisis is legislative malfeasance.

Illinois has taken the budget gimmicks seen in many states to an extreme. Occasionally, states postpone payments during budget crises to close budget gaps. But for the last decade, Illinois has made a standard practice of delaying vendor payments — even in good years — and then periodically floating general obligation bonds to clear the backlog.

The state has also used its pension system as a venue for stealth borrowing. From 1996 to 2008, the state’s unfunded pension liability grew by $36 billion — and $19 billion of that growth was due to elected officials funding pensions below the actuarially required level. has sent a letter to Connecticut officials explaining why the proposed “Amazon tax” won’t work and noting that they will probably end their affiliate program in the state if it passes. Check out our report on “Amazon taxes” here.

More on state tax policy here.