7/25/2012 2:23 PM ET|
Where taxes are already going up
Many local governments have already increased taxes. What does that mean for the possible end-of-year US income tax cut expiration?
If you're paying attention to the drama over the "fiscal cliff," you know that federal income tax rates will skyrocket at the end of this year, if Congress fails to act. While that's sure to be a huge battle, taxes are already going up in a lot of states and cities, in a preview of what's coming sooner or later at the federal level.
A recent analysis by the nonprofit Tax Foundation shows that 13 states and the District of Columbia raised sales tax rates between 2007 and 2011, largely to rake in more revenue as the recession cut into state budgets. In Arizona, California, Indiana, Iowa, Kansas, Maryland, Massachusetts and Utah, sales taxes rose by a full percentage point or more -- although in a few of those states, the increase is supposed to be temporary.
That's on top of a lot of other new revenue that states and cities have been collecting from taxpayers. Between 2008 and 2010, 36 states raised taxes or fees, according to the National Association of State Budget Officers. One of the biggest hikes was an increase in Illinois's income tax rate from 3% to 5%. In many other cases, there have been hikes in targeted taxes on products such as cigarettes, alcohol, hotel rooms and rental cars, as well as higher fees for car registrations, hunting licenses and many other things administered by the government.
At the same time, many municipalities have been raising property taxes to offset the loss of revenue that has come from plunging home values. On top of that, states and cities have been cutting services, including the number of teachers, cops, firefighters, road crews and DMV staffers.
The irony, of course, is that many Americans are outraged at the federal government, even though a slew of federal tax breaks over the last few years has lowered Washington's bite out of most paychecks. Voters have a better attitude toward the state and local governments that are raising their taxes. A recent Allstate/National Journal poll, for instance, found that just 51% of people trust information from the federal government, while 61% trust state government and 66% trust local government.
That trust gap may come from the fact that Americans see less of the political maneuvering that happens at the state and local levels, while the political machinations of national politicians tend to dominate the news. Whatever the reason for the trust gap, there are two major implications.
First, voters aren't so opposed to new taxes that they'll storm the barricades if they go up by a single penny. Many people recognize the need for additional money to fund public services we all depend on. What they care most about is making sure their tax money is spent on legitimate, useful things, not on boondoggles or bridges to nowhere.
Second, for all the worry about the added burden on consumers if Washington raises taxes, many consumers are already bearing an added burden. So if there are further hikes at the federal level, they will only add to the pain many consumers are feeling. That is likely to make people even crankier toward the federal government.
Most economists agree that the country's budget mismatch is so large that there's no way to close the gap with spending cuts alone. Federal taxes will have to go up, even if there are major spending cuts. So the time is coming when the federal government will have to copy the states and cities that are already dunning their citizens for more money. When Washington comes knocking, many taxpayers will be able to genuinely answer, "I already gave."
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Quite simply everyone needs to pay equally. My wife and personally pay in $12K or more per - at the same time we are paying in - my sister-in-law - who pays almost no federal tax during the year - approx. $400 will get a check back from the governement every year over $2,000. This is abolsultely ridiculous - - even if the governement would just stop giving back money not paid in it would save us trillions!
I feel it should simply be paid on what you spend - this would get everyone - indlucing big businesses etc. If you spend it you pay it.
In addition, the government needs to run themselves like a business - while most of us were loosing our jobs and taking pay cuts - the goverment was hiring and giving raises - along with huge benefits and retirements.
I know it is mostly improbable that we would ever ban together as one people - but we could and we could change things if we did that. History tells us it works and works very well when people finally decide to unite. Personally, I don't see why we have a federal goverment when we all have state governments.
Taxes are going up in Counties and States where waste, fraud and abuse run rampant. Mismanagement and giving in to lobbyists is why so many state and county budgets are going bankrupt, and why the need for more tax revenue. A good example of waste, fraud and abuse is the bankrupt city of San Bernardino, CA., where they've already spent over $120 million tax dollars on an airport to nowhere. No wonder all of these cities and states need to raise taxes.
And what about all those toll roads in the Chicago area. When they were first built in the late 50's the intent was to impose a temporary toll until the bonds were paid off. That was over 50 years ago. Where are all those toll dollars going?
There you have it...waste, fraud and abuse=high taxes.
The Peoples' Republic of Maryland has raised taxes on virtually everything that moves. Our boy governor and presidential wannabe can't understand why businesses and upper-middle income people are fleeing the state in droves. Maryland lost more jobs than any other state for the first six months of this year and Gov. O'Malley's answer: raise taxes!
The jobs that could have made a difference have all been out sourced or sent overseas, and it wasn’t the poor that sent those jobs away. The uber rich control and are the government. They pass laws that benefit their family businesses while at the same time eliminating the competition of the small to medium businesses that do provide what few jobs are left. The uber rich took their fortunes overseas many years ago and will continue to strip America of anything of value before it sinks, they can’t be touched they control BOTH political parties. So now we are told we need to up the taxes on the few remaining businesses that are left in America, these are the bad and evil rich keeping us all from getting our proper amount of ? The grand parents will pass away all their money spent by their own children who bled them dry on overseas products and gadgets provided by the now overseas uber rich. Competition from America successfully wiped out, destroyed, and not a threat. We as a nation are falling for it and allowing it to happen
the media and politicians create the divide between reps and dems - while we allow mismanagement of funds, overtaxation, special benefits for gov't, no responsibility or accountibility, etc. instead of arguing over issues they create, reps and dems should come to an agreement, unite and DEMAND: balanced budgets, elimination of corruption, elimination of fraud in social programs, transparency, ACCOUNTIBILITY and THE SAME BENEFITS FOR POLITICIANS & gov't employees. if they can't manage budgets based on tax income, then they need to be FIRED...at all levels-city, county, state, and federal. NO NEW TAXES. eliminate the 2 party system, eliminate campaign contributions, eliminate lobbying, AND MAKE CONGRESS READ A BILL BEFORE THEY VOTE ON IT.
i've said this before, don't need to be a republican or democrat to know right from wrong and act upon it.
The problem with this country is one that both parties are responsible for, republicans no tax increase on the rich the dem's money give aways. For all those people who pay no federal tax the time has come to pitch in as well as the extremely rich its time no more bush cut's for you, were all so greedy tax them make them pay. Well we all live in this country and we all should share in its funding. Now we do need to stop needless spending, first let’s have election funding reform for real if the politicians do not owe anyone we would have less useless spending. The bottom line republicans are totally wrong cut taxes never works it’s just natural the price of living goes up so will and should taxes. If we all paid it would be minimal on us all.
So much drama ....RW...calm down you'll blow an artery. Who will speak if you don't calm down?
First of all ...taxes need to be reduced for the middle class and lower classes.
The people above $250000.00 can to pay more. Corporations will get tax breaks if the jobs come back home.
RW will have health care for his pre-existing condition after his artery explodes.
It's all good.
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