States Look to New Taxes to Help Close Budget Gaps

States Look to New Taxes to Help Close Budget Gaps

New taxes are almost guaranteed for the states facing budget issues.  Roughly 44 states face this issue and the budget gaps total $125 billion between the states.  While some states have a larger gap than others, California’s is $25 billion or 20% of the country’s total, all states will likely add new taxes.

The Center for Tax and Budget Accountability in Chicago has designed a fiscal rescue plan for Illinois.  The plan is designed to spread out the tax burden instead of simply increasing income and property tax.  Illinois is considering taxing services along with an increase in sales tax.

Also they are considering on raising income tax rates and plan on installing a progressive tax rate that would raise the rate on higher income brackets.  As of now, poor people would be taxed at the same rate as multi-millionaires.

I am a fan of this idea and if Pennsylvania is looking to raise taxes, they should take a look at Illinois’ plan.

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