It's not clear if the numbers in the article apply to existing, shrunken tax bases, or the tax bases when the recovery (sic) is more advanced. If it ever becomes more advanced. In that sense the estimates could be biased in favor of hysteria.
In some limiting cases politically tenable tax increases would not cover budget gaps. Illinois by the way is in the worst shape in the country, even after they do their big income tax hike (albeit from a very low base), if they do it.
The sad truth is that the Feds could make all this go away for about $150 billion, a minor share of current deficits.
On Thu, Jan 20, 2011 at 12:05 PM, Wojtek S <wsoko52 at gmail.com> wrote:
>
> http://www.nytimes.com/2011/01/20/business/economy/20tax.html?pagewanted=1&_r=1&ref=todayspaper
>
> I find this argument suspicious. It looks like a straw man to me. I am
> not
> an expert on state finances, but it looks to me that if state sales taxes
> were at the level of EU VAT (currently about 22%) and services were taxed
> as
> well, it would generate enough revenue to close deficit gap, no? Max?
>
> I understand that some would cry foul about the "regressive" nature of such
> tax, but I think it is bogus too. People buy a a lot of schlock -
> schmy-pods, fashionable schmatas, flat screen tee-vees and so on. If they
> were taxed at 22%, people would simply buy less of that shit so their out
> of
> pocket expenses would not necessarily increase. It would help the
> environment too. The only thing it would hurt is corporate profits, but
> why
> should people like me give a flying fuck about them?
>
> Wojtek
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