Saturday, September 5, 2009

Mitch Daniels on the the future of state government

In The Wall Street Journal Mitch Daniels writes that states face serious problems in the next few years because revenues will not recover for some time. He especially thinks the tax-and-spend states faces a bleak future:
The "progressive" states that built their enormous public burdens by soaking the wealthy will hit the wall first and hardest. California, which extracts more than half its income taxes from a fraction of 1% of its citizens, is extreme but hardly alone in its overreliance on a few, highly mobile taxpayers. Both individuals and businesses are fleeing soak-the-rich states already. Those who remain in high-tax states will be making few if any capital gains tax payments in the years to come. Even if the stock market comes roaring back to life, the best it could do is speed the deduction of recent losses.

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