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Thursday, January 01, 2009
Donald Lambro :: Townhall.com Columnist
States Ring in the New Year with Increased Taxes
by Donald Lambro
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WASHINGTON -- As Barack Obama lobbies for his aid-to-the-states economic stimulus plan, governors are preparing to sharply raise taxes and fees that will hurt the low-to-middle-income families he wants to help.

A review of budget proposals being cooked up by governors across the country shows they intend to raise next year's taxes on clothes, shoes, soda, hospitals, health insurers, gasoline, auto licenses and many other expenses that most Americans consider necessities.

State officials say they are required by law to balance their budgets and that some tax hikes are necessary to do that, but fiscal analysts say that raising taxes in the middle of an economic downturn will only worsen local economies and prolong the recession.

"Middle-income families do not get wage increases during a recession, but neither should the states. Families have to cut back and so should state governments. They should cut spending," said fiscal analyst Chris Edwards who tracks state budgets at the Cato Institute.

"These states should have been retrenching after budget increases of 7 percent over the last two years, but they repeated the same mistakes they made in the late '90s, assuming the good times were going to last forever," Edwards told me.

In its annual report on the states, the National Governors Association reported last month that, "Most states experienced poor fiscal conditions in 2008, with conditions for fiscal 2009 expected to continue to severely decline as the national recession deepens."

But spending critics said that not enough attention was being paid by the national news media to the plight of taxpayers whose incomes were being depleted by rising sales taxes, fees and higher property taxes.

"Most reporters are covering the state budgets and thinking 'Oh, the poor states' and no one is looking at this from the perspective of the taxpayers who are the ones whose wallets are going to be on the line," said political strategist Trent Duffy.

While states are generally holding the line on income taxes, analysts said many are pushing tax and fee increases on the necessities of life:

-- In New York, Democratic Gov. David A. Patterson has proposed a $4 billion-revenue package that includes 137 new or increased taxes and fees that will impose an 18 percent anti-obesity tax on non-diet soft drinks, extend the sales tax to clothing and shoes under $110, and raise taxes on car rentals, gasoline, cable-TV service and a host of professional licensing fees from barbers to home inspectors and manicurists. He also wants to end property tax rebates and raise fees on motor-vehicle registration, auto insurance and state parks and hike tuitions at state universities. Continued...

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About The Author

Donald Lambro is chief political correspondent for The Washington Times.

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"generating" revenue
Generating tax revenue simply destroys wealth.

Five Dem Govs want Fed Bailout
Even worse than the new taxes these morons are proposing is the idea of the Fed bailing out these states who spend more than they take in. Never does the topic of cutting the actual spending that is causing these problems even get considered. The American taxpayer is already under enough pressure to cut their own spending and hang onto their jobs, the burden of rescuing fiscally irresponsible states from the deserved results of their spending orgies should not fall on people that don't even live or vote in these liberal states!
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