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<p class=MsoNormal>Visionaries,<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal style='margin-right:465.75pt'>The Center on Budget and Policy
Priorities has just released a paper looking at which states have raised taxes
(and fees) during this recession to help balance their budgets. I have cut
and pasted an excerpt below. A couple of things that caught my eye were
that Wisconsin closed some tax exemptions and broadened the sales tax base, things
Idaho is sorely in need of doing, and that Virginia increased its corporate
income taxes. Several years ago Micron, which has been a major cause of job
losses in Idaho, opted to build a plant in Virginia rather than to expand in
Idaho. At the time Micron said it was because Virginia’s education
systems were stellar, but stellar education systems cost money.<o:p></o:p></p>
<p class=MsoNormal style='margin-right:465.75pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-right:465.75pt'>I imagine this paper will be
revised after more of the states finish their legislative sessions, and then
Idaho will be included as having raised some new revenue because vehicle fees and
a couple of other things were raised a little in the going-home transportation
package.<o:p></o:p></p>
<p class=MsoNormal style='margin-right:465.75pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-right:465.75pt'>Judy Brown <o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
<h2><span style='font-size:12.0pt;font-weight:normal'>From</span><span
style='font-size:12.0pt'> “Tax Measures Help Balance State Budgets”
</span><span style='font-size:12.0pt;font-weight:normal'>released today by the Center
on Budget and Policy Priorities</span><span style='font-size:12.0pt'><o:p></o:p></span></h2>
<h2>Tax Increases in the Current Recession<o:p></o:p></h2>
<p>State tax increases began with the recession’s onset in late 2007, in
order to preserve education, healthcare, and other services in the face of
flattening or declining revenues. At least 10 states enacted tax and revenue
measures in late 2007 or 2008. These included major revenue packages in
Maryland, Michigan, and New York, and somewhat narrower measures in Alabama,
California, Delaware, Massachusetts, New Hampshire, New Jersey, and Rhode
Island.<o:p></o:p></p>
<p>As the recession has lengthened and budget shortfalls deepened, states have
increasingly turned to raising taxes as part of the mix of responses. So far
this year, 16 states have enacted tax increases, and (as of May 5) another 17
are considering such measures. (See Figure 1.)<o:p></o:p></p>
<h3>Enacted Tax Increases In 2009<o:p></o:p></h3>
<p>Major tax increases enacted to date include those in California, New York,
and Wisconsin.<o:p></o:p></p>
<ul type=disc>
<li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
mso-list:l0 level1 lfo1'>Faced with a $13.8 billion shortfall in the
coming fiscal year, New York adopted a budget that includes both cuts in
services and tax increases. The revenue increases included two new
temporary income tax rates levied on the highest-income filers.<br>
<br>
New York also placed limits on itemized state income tax deductions for
taxpayers making over $1 million, reduced a state-funded credit on New
York City’s personal income tax, eliminated a property tax rebate,
and expanded sales tax collections on Internet purchases.<o:p></o:p></li>
<li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
mso-list:l0 level1 lfo1'>Similarly, California’s budget for the
upcoming fiscal year includes temporary tax increases as well as budget
cuts. The package includes a one percentage point increase in the state
sales tax; a 0.25 percentage point increase in state income tax rates; a
reduction in a tax credit for dependents; and raising the Vehicle License
Fee (a tax on the value of cars and trucks) to 1.15 percent from 0.65
percent.<a name="_ftnref1"></a><a
href="http://www.cbpp.org/cms/index.cfm?fa=view&id=2815#_ftn1" title="">[1]</a>
In total, tax increases will raise about $12.5 billion in new revenues
through June 30, 2010.<o:p></o:p></li>
<li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
mso-list:l0 level1 lfo1'>Wisconsin enacted a number of measures to raise
new revenue by broadening what is covered by the state’s sales and
corporate income taxes. Measures affecting the sales tax include: ending
the exemption for digital downloads; altering the method of taxing
prewritten computer software; and entering into the multi-state Streamlined
Sales and Use Tax Agreement (SSUTA) — a compact that simplifies
sales tax collections for participating businesses. Additionally, state
officials recently enacted new hospital assessment fees, which are
expected to raise about $310 million in fiscal year 2010. A measure known
as “combined reporting” that expands the corporate income tax
base to tax in-state and multi-state corporations more equivalently was
also enacted.<o:p></o:p></li>
<li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
mso-list:l0 level1 lfo1'>Hawaii increased income tax rates for the
highest-income taxpayers. The new top rate is 11 percent and applies to
taxable income over $400,000 for married couples and $200,000 for single
taxpayers; it is effective for tax years 2009 through 2015. Hawaii also
increased hotel taxes, real estate transfer taxes, and tobacco taxes.<o:p></o:p></li>
<li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
mso-list:l0 level1 lfo1'>Virginia raised revenues by restructuring an
income tax credit and taxing some investment income of corporations.<o:p></o:p></li>
<li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
mso-list:l0 level1 lfo1'>Colorado’s governor signed legislation
increasing vehicle fees and hospital fees, and reducing the rate at which
the state reimburses retailers for collecting sales taxes.<o:p></o:p></li>
<li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
mso-list:l0 level1 lfo1'>Arkansas, Kentucky, Rhode Island, and Wyoming
approved increased excise taxes on alcohol products, tobacco products, or
both.<o:p></o:p></li>
<li class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
mso-list:l0 level1 lfo1'>Various other taxes or fees were increased in
Georgia, Iowa, Maryland, Nevada, South Dakota, and Utah.<o:p></o:p></li>
</ul>
<p class=MsoNormal><o:p> </o:p></p>
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