Sunday, January 08, 2017


A report at The Hill has the man-bites-dog headline "Red States Mull Higher Taxes." What?! Republican states have broken with long-standing GOP policy after realizing that tax cuts for the wealthy don't cure all ills?

Well, not exactly:
Legislators in some of the nation’s most conservative states are considering new ways to boost revenue -- including tax increases....

It is a reversal, in many ways, of recent trends toward deep tax cuts, led by states like Kansas, where Gov. Sam Brownback (R) and the Republican-dominated legislature slashed rates on individuals and businesses in hopes of spurring economic growth. Kansas now faces a $350 million budget hole this year, and a likely $600 million gap next year.
So what are they doing in Kansas?
This year, a coalition of centrist Republicans and Democrats are plotting new tax hikes to plug those holes. The legislature is likely to roll back a tax cut on small businesses Brownback signed in 2012, while also raising gas taxes.
Oh -- so they're not reversing the income tax cuts of recent years, which benefit the wealthy the most? Nahhh, you can't do that in a red state.
... At least eight other states, including Tennessee, Arizona and Missouri, are considering raising gas taxes...

In Oklahoma, legislators must come up with enough revenue to close a $1.4 billion budget shortfall.... Gov. Mary Fallin (R) has reversed her earlier opposition to raising the gas tax. She has also floated the possibility of raising taxes on tobacco, and of broadening the sales tax base to include some services.
Can we talk about gas tax increases? There are some on the left who say they don't hit poor and working people hard, but much of the data on which that conclusion is based is more than a decade old. It's believed that wealthier people buy more SUVs and gas guzzlers. But it's likely that poor and working-class people buy fewer hybrids and other fuel-efficient vehicles, and keep old beaters on the road longer. A 2015 report from the Institute on Taxation and Economic Policy (ITEP), a group whose board members include Robert Reich and Robert Kuttner, tells us this:
Overall, state excise taxes on items such as gasoline, cigarettes and beer take about 1.6 percent of the in­come of the poorest families, 0.8 percent of the income of middle-income families, and just 0.1 percent of the income of the very best-off. In other words, these excise taxes are 16 times harder on the poor than the rich, and 8 times harder on middle-income families than the rich.
And those are the taxes these red states want to raise.

More from The Hill:
In Indiana, where Vice President-elect Mike Pence (R) made tax cuts a priority during his term as governor, his successor, Gov.-elect Eric Holcomb (R), has also proposed raising the gas tax and adding some new vehicle fees.

Nebraska legislators are debating a deeper shift in the state’s tax code. One faction in the ostensibly nonpartisan unicameral legislature wants to reduce income taxes while raising sales taxes. Another wants to shift emphasis from property taxes to sales taxes. Gov. Pete Ricketts (R) has said he would like to cut both property and income taxes, though the state faces a $900 million shortfall.
Republicans have two approaches to taxes: Cut them all drastically (while slashing social services), and if there's an income tax, make it less progressive, i.e., less burdensome to the wealthy. Then, if that blows a hole in the budget, raise the taxes that hit the poor and middle class the hardest, and never, ever restore those income-tax cuts for the rich. Raise taxes on everyone else instead.

Republicans know this doesn't lead to fiscal health or general prosperity. They don't care. They keep doing it, because they serve only the wealthy, and have nothing but contempt for the poor and middle-class whites who keep voting for them.

And in a way you can't blame them for how they operate, because, well, those non-rich voters keep voting for them. And even after this next round of tax changes, I'm sure they still will.


Blackstone said...

Some people cannot be taught and they will never learn. I am hoping this turns out to be a minority, but its going to be a long 4 years.

rclz said...

I'd be curious to know what the average gas tax is in a red state. I live in Washington, which is blue (On the most populated side)and I have a hunch our gas tax is one of the highest at 44.5. Add in the feds 18.4 and you get 62.9, as the ledg tries to find money to do something about the traffic. I just don't want to be throwing stones, if the raises that the red states are talking about are well below what I'm already paying.

We don't have a state income tax but we have a sales tax that is upward to 9.9% depending on where you live in the state.

My understanding is that because we balance everything on sales tax, gas tax and not on an income tax that we do indeed hit the poor harder.

There has been grumbling about instituting a income tax but if the Democratic controlled state government does it, they'll lose another state to the GOP. You are never going to make people see that this might be a good thing for everyone.

Anonymous said...

Oregon's experience with sin taxes has met with less than stellar success. In desperation the dumpf ucks have proposed taxing everything from ale to zucchini, with tobacco at the top at all times.


Oregon raked in so much marijuana tax last year that the state literally does not know what to do with it. Supposed to go to education, health care and law enforcement, but (for a ready to hand example)... the I5 corridor isn't closed to truck traffic today because of the current arctic storm, it's closed because the federal highway system bridges are failing and the ice storm aggrivates that danger to the motoring public (most of whom shouldn't drive on dry pavement). Somebody has to fix them, and it's pretty clear it won't be the dumpf ucks in DC.

There's nothing east of the Rockies we need.
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