Tags: state taxes | hike | red states | deficits

The Hill: Red States Might Face Tax-Hike Fights

Image: The Hill: Red States Might Face Tax-Hike Fights

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By    |   Sunday, 08 Jan 2017 12:35 PM

Congressional lawmakers return to their state capitals this week and might bring with them plans to raise taxes to fill budget holes – even in red states – despite the incoming presidential administration and GOP-led Congress preparing federal tax proposals, The Hill reported Sunday.

The potential tax increases on gas, tobacco, internet sales and lotteries might come as a result of states facing growing budget deficits amid economic decline after past tax cuts affected revenue and Trump's infrastructure plans will add to spending, according to the report.

"States have been spending too much money," Grover Norquist, head of Americans for Tax Reform, told The Hill, adding raised taxes are "a function of which states are keeping their spending under control."

For instance, the GOP-led Kansas faces a $350 million deficit this year and perhaps $600 million next without changes, per The Hill. Rolling back GOP-enacted tax cuts and adding revenue in Kansas might prove to be a model for other states, including Tennessee, Arizona, Missouri, Oklahoma, Mississippi, Indiana, and Nebraska, per the report.

"We could be much more competitive in the tax world," said Linda Upmeyer, the Iowa House speaker, told The Hill.

Increased gas taxes might be at the forefront, considering fuel efficient vehicles have impacted revenue and state budgets, but it becomes tricky when you consider it raises the cost of doing business.

"[Gas taxes] haven't been raised in a long time, and they haven't been adjusted for inflation," Michael Leachman, director of state fiscal research for the Center on Budget and Policy Priorities. "The politics around gas taxes are such that you get business interest in the kinds of transportation projects that help them get their products to market."

Other red states which might have to raise taxes, according to the report, including Oklahoma, which is facing $1.4 billion deficit partly due to plunging oil and gas prices. Gov. Mary Fallin, R-Okla., might have to raise taxes on gas, services, and tobacco.

"We've seen more states go back to the trough on that one," Scott Drenkard, director of state projects at the Tax Foundation, told The Hill, about increased tax on tobacco.

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Congressional lawmakers return to their state capitals this week and might bring with them plans to raise taxes to fill budget holes - even in red states - despite the incoming presidential administration and GOP-led Congress preparing federal tax proposals, The Hill...
state taxes, hike, red states, deficits
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2017-35-08
Sunday, 08 Jan 2017 12:35 PM
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