NCPA - National Center for Policy Analysis


May 2, 2005

Governors wanting to raise taxes in their state should take a look at the Census Bureau's annual survey, which shows every state in the country experienced revenue growth in 2004, says the Wall Street Journal.

The Journal says if empirical data means anything, the Census report on revenues should settle any dispute about whether states are taking in enough money to provide reasonable government services. Some of the survey's results include:

  • Last year, state receipts grew 8.1 percent to $593 billion, a $44 billion increase from 2003.
  • Sales taxes and personal income taxes make up more than two-thirds of state tax collections, and the Census says they grew by 7.5 percent and 8.5 percent respectively, in 2004.

Furthermore, says the Journal, levies on property and corporate income also continue to rise, which indicates taxpayers across the board are paying their fair share. So while state politicians plead poverty as an excuse to raise taxes and fees, the revenue boom continues.

Today, instead of constricting government spending by eliminating or reforming costly programs to prepare for the next economic downturn, too many states are returning to their old reckless spending ways, says the Journal.

As the Cato Institute?s Stephen Moore and Stephen Silvinski noted, federal government spending rose by 60 percent between 1990 and 2002, but state spending doubled during the same period -- far beyond what inflation and population growth dictated.

The Journal says some of the worst offenders, who insist on raising taxes despite their states' revenue growth, include the governors of Virginia, New Jersey, Ohio and Indiana. For example, last year, while Virginia's receipts were rising 9.7 percent, Governor Mark Warner pushed through the largest tax increase in Commonwealth history.

Source: Editorial, ?Revenue Boom (Cont.),? Wall Street Journal, April 29, 2005.

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