As March 1st approaches, most of the country’s governors have submitted their budget proposals to their respective legislatures. Here is a quick rundown of some of the notable tax proposals. Those hyperlinked have been blogged on recently. Connecticut: Governor Rell proposed to raise the state’s income tax on income over $10,000 from 5 percent to 5.5 percent and raise the cigarette tax. Florida: A proposal from the speaker of the house to lower local property taxes by increasing the sales tax 50 percent. Another in the growing trend of property-tax-decreases-for-sales-tax-increases proposed around the country. Illinois: Governor Blagojevich is reported to be proposing a gross receipts tax on top of the state’s sales tax and corporate income tax. Check out two recent Tax Foundation papers on gross receipts taxes to learn why this is a disastrous idea here and here. North Carolina: Governor Easley wants to delay scheduled decreases in the state’s sales tax and income tax that were originally temporary increases scheduled to phase out years ago. Pennsylvania: Governor Rendell proposed the increasingly popular property-tax-decrease-for-sales-tax-increase swap, in addition to a windfall profits tax on oil companies and a cigarette tax hike. In addition to these proposals, 14 states, including Connecticut and Pennsylvania mentioned above, are proposing to increase cigarette taxes. They include: Delaware, Indiana, Iowa, Maine, Maryland, Michigan, Mississippi, New Hampshire, Oregon, South Carolina, Tennessee and Wisconsin.
