States’ Budget Crack Being Filled With Tax Hikes

Tuesday, June 16, 2009, 11:30 AM | Leave Comment

These days, we, the American people, seem to be responsible for almost everything. If the Federal or State needs to fill their treasury, the authorities look up to us. I don’t know about you guys, but I have not felt so important in my life of 6 decades as I do now, even though the recession may have sucked out the last drop of blood from my financial life. I hope I spelled that right. I always get confused using the words decades and decays. My friend from the 60s says you are spelling it correctly. It’s just that we feel like it’s 6 decays. Any way, whether we like it or not, we have to pay for the tax hikes that will be shoved down our throat for years to come.

Is it mismanagement or the overall national economy is in disarray? But the disarray has to be because some people acted irresponsibly and in turn it created mismanagement or perhaps it is the other way around.

State legislators faced with mammoth budget gaps and sharply lower revenue are looking to residents to bail them out. We have been asked to bail out companies and now we are being asked to bail out our respective States. No wonder I feel so important and happy. Somehow this statement doesn’t make sense.

More taxes mean more anger management on my part. I gotta be sad and angry. I gotta go to an institution – no, I don’t mean that kind-a-institution even though admitting there is getting closer and closer – and take a course in anger management. See? Mismanagement and irresponsibility on the part of someone else is making me do all sorts of things. Why should I pay for it?

I, not only, have to pay for the tax hikes but I also have to pay for “anger management” course from my pocket. My friend from the 60s says “Dude, we have to be correctly responsible and have to be correctly involved in what the State is doing.” Sometimes, I don’t understand what he means but that’s what he says.

Right now, at least 47 states are facing significant shortfalls in their 2009 and/or 2010 budgets, according to the Center on Budget and Policy Priorities, a think tank in Washington, D.C. And many of those states are looking to tax hikes to help fill the gaps.

The top honor goes to California, which is projecting that it will fall about $25 billion short come fiscal 2010. Taking second place is New York with a projected $17.6 billion deficit for fiscal 2010, according to the National Conference of State Legislatures, a bipartisan policy research organization in Washington, D.C.

How can these states miss the mark so badly? The recession has lowered state revenue from the two major sources: income taxes (thanks to rising unemployment, fewer people are getting paid) and sales taxes (quite simply, consumers are spending less.)

In a Nutshell
Sooner or later – for the states, the sooner the better – your state taxes will be increased. For the same amount of money you are making now, your take home pay will be less than it is now. Hopefully, the difference will be less than $5.

What do you think?

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