Wednesday, January 22, 2003

Sorry to remind you about tax season

The Washington Post has an interesting analysis of the emergent GOP realization, at the state-level anyway, of the economic reality that tax cuts are an economic stimulus only if spending increases as well. When your state constitute doesn't allow deficit spending, well . . . case in point, Idaho Governor Dirk Kempthorne:

In a turnabout that echoes nationally as states face their worst fiscal crises since World War II, the governor who cut taxes 48 times in his first term opened his second one by calling for increases in state cigarette and sales taxes.

But, "That's so un-Republican," they scream from all sides of Lake Coeur d'Alene. Alas:

"I have done something that is absolutely not part of my fiber," Kempthorne said in an interview last week. "But I'm not going to dismantle this state, and I'm not going to jeopardize our bond rating, and I'm not going to reduce my emphasis on education."

Same goes for Republicans Sonny ("Whistling Dixie") Perdue down in Georgia, Mike Huckabee in Arkansas, John ("No New Taxes") Rowland in Connecticut.

For more detailed reading about the financial pickle most of our states are in-- amaze your friends! -- check out the National Conference of State Legislatures budget report, and then, to remind yourself of the financial pickle you're in, check out the excellent analysis of local and state tax burden over at Who Pays?

Update: By the way, very good articles in yesterday's New York Times and Slate about "double-taxation', and its levelling effect on the tax rates for all income levels. Something to keep in mind when you're reading Forbes, or talking to somebody who does, and are nearly convinced that a flat-tax is the way to go.