Progressive taxation worsens budget deficits
Regarding the May 10 column "Best tool for cash-strapped states? Progressive taxes."
Karen Kraut's argument that raising progressive taxes is the best way for states to be dealing with their budget crises is both misguided and dangerous. The idea that we can trust government to "pick the right taxes" is naive at best.
The fact is, many states have already begun to see the consequences of using progressive tax hikes, massive borrowing, and budgetary tricks to prop up more government spending.
In 2008, at the onset of the recession, Maryland implemented a "millionaire's tax" instead of making spending reforms. A year later Maryland was home to a third fewer millionaires, and it's expected to face another $1.5 billion deficit in 2011.
Lawmakers should instead be adopting spending reforms that would help prevent budget deficits from recurring. Relying on steeply progressive taxes put many states, including California and New Jersey, in dire fiscal situations.
When states become more reliant on a small percentage of wealthy taxpayers for the bulk of their tax revenues, they are more susceptible to tax revenue booms and busts. So when the economy goes through downturns, states have far steeper budget deficits than they would if their tax code comprised low, broad, and flatter taxes.
John Nothdurft Legislative specialist, Budget and Tax Policy,
Virginia's citizens are overtaxed already. If you live in Virginia, you can't miss that fact. As it is, Virginia squanders way too much money at all levels from state to county to city. We do not need more taxes; we need less spending. Less waste, fraud, and abuse would also be helpful.
Karen Kraut's suggestion would bring disaster to senior citizens who often have to spend 40 percent of their Social Security income on just their real estate taxes.
Is Ms. Kraut saying she agrees with our wasteful politicians that senior citizens should move away, so they can be replaced with higher-revenue-producing citizens? Removing the itemized deductions from the state income tax could be the straw that breaks the camel's back and pushes senior citizens out of their homes.
The government must stop taxing anything but income.
How can Kraut or anyone expect senior citizens to keep paying these taxes on their homes and cars as well as all the other myriad taxes when they have no money to do it with?