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Make Tax Systems More Progressive

State Capital Gains Taxes Seen as Option for Raising Revenue

Many states are finally taking a more balanced approach to their budget troubles by looking to raise revenue to avoid further deep cuts to education and health care, including New York who recently restructured their tax structure to generate more revenue from millionaires and California who is considering the same. These kinds of reforms will help states shore up their immediate revenue shortages, but will also bring long-term stability and flexibility as they look to rebuild their economies in the years to come. However, there are a handful of states that don’t currently have the option of generating revenue this year by taxing wealth because they lack a state income tax, making them more vulnerable to lagging revenues in a prolonged downturn like we’re experiencing now. This is certainly the case for a state like Washington, which has experienced some of the most severe budget deficits over the past three years, because they are too dependent on the state sales tax as a revenue stream. That’s why the Washington State Budget & Policy Center is building support for a proposal to tax the capital gains of the state’s wealthiest residents.

MO: Gov. Nixon Creates Commission to Review Tax Credits

JEFFERSON CITY, Mo. (AP) -- Gov. Jay Nixon has appointed a committee of 25 people to review Missouri's 61 tax credit programs.

Nixon's office said Wednesday that the Tax Credit Review Commission will recommend ways for tax credits to meet their goals more effectively and generate a better return on investment for taxpayers.

Maine Voters Reject Tax Reform Initiative, but Approve Infrastructure Investment

This past Tuesday, Maine votersconsidered legislation which would have reformed the state's tax structure and bond measures that will bolster infrastructure investment.By a large margin, Mainers rejected a law passed last June, LD1495, to lower the top income tax rate from 8.5 percent to 6.5 percent for state residents earning less than $250,000 annually by broadening the sales tax to include different services and shifting tax burden to nonresidents by increasing the meals and lodging tax from 7 to 8.5 percent.

Tax Day: With Middle Income Families Paying Less Federal Taxes, States Have More Leeway for Revenue Increases

As states struggle to close budget gaps, it's worth highlighting that due to tax changes at the federal level, most middle income families are paying a far smaller percentage of their income in federal taxes than they did a few years ago.  So while states should concentrate revenue increases on those who can most afford it, there is greater capacity among middle income families to absorb some tax increases due to the lower federal tax burden.

Revenue Options in 2010: Making the Case and Debunking the Myths

Last Tuesday, Oregonians overwhelmingly approved two ballot initiatives that ratified legislative action last year to increase high-end personal income and corporate taxes.  The failure of the anti-tax movement in Oregon is one more in a long stream of right-wing initiatives rejected by voters at the ballot box.  In fact, progressive revenue generation as part of a balanced approach to addressing state deficits has been popular with both voters and legislatures for years.  This Dispatch will provide both the facts and messages to debunk opposition to smart revenue options, while outlining a few of the best revenue approaches to filling budget holes.