This weekend, the National Governors Association will be convening to discuss the various budget crisis faced by the states. It is a balancing act, trying to bridge massive budget deficits, while keeping unemployment down. This has lead to drastic action by states such as Wisconsin and Illinois. What everyone will have to come to terms with, is that taxes will be increased and spending drastically cut. As a matter of fact, Illinois instituted a 66% temporary personal income tax to close a $15million budget gap. Thoughts on the article? Do you see other states drastically raising taxes like this soon?
http://seattletimes.nwsource.com/html/nationworld/2014334219_apusgovernorsbudgetwoes.html
As stated in the article, everyone is trying to recoup this deficit by looking at costs and trying to balance everything out. Yet, it is a very grim looking future because no one exactly knows where this money will come from. Raising taxes seems to be easier than just finding a way to lower costs, so yes I believe that this will happen soon. Yet, no one is going to be happy about this decision, but that's the nature of taxes. Equity and efficiency falls.
ReplyDeleteI could definitely see other states drastically raising taxes like Illinois and its 66% temporary increase in the personal income tax. It would absolutely hurt the citizens of the states in the short-run, but policies such as these drastic tax increases seem worthwhile if these states want to drag themselves out of their budget deficits and recover in the long-run. Also, Obama's proposal for high-speed rail throughout the US really caught my eye and is very intriguing. In my opinion, this sounds like a great investment for the United States. It would create jobs and reduce dependence on foreign oil. Also, in the long run, I think the tourist industry would pick up in America because train travel is so much cheaper and easier. When I studied abroad in Spain, I frequently used high-speed trains to travel around Europe. I think the US would definitely benefit if it invested in a high-speed rail system.
ReplyDeleteAlthough everyone hates taxes, I can definitely see other states drastically raising taxes to balance out the state debt. I say this because you can only cut so much spending from all these programs before they get to the point where you literally can't take any more money away. Some many state programs are already at this point that they can't face another cut. Thus, raising taxes is one realistic solution to solving these state budgets. Whether or not everyone can afford to pay more taxes is a completely different story.
ReplyDelete