REUTERS
By Joan Gralla – Analysis
Feb 26, 2009
NEW YORK (Reuters) – U.S. states, already battered by the financial crisis, risk suffering a further hit to their coffers when individuals file their income tax returns in April.
Falling income tax receipts from wealthy individuals could further gouge their already battered budgets, according to state officials and financial analysts.
Raising income taxes, as California did just last week, may fail to raise more tax dollars as the incomes of some wealthy people are falling too precipitously.
Yet most U.S. states by law must balance their budgets. The risk that their credit ratings will be cut if they borrow or sell assets, from hospitals to water systems, to close deficits may force states into difficult spending cuts. …
http://www.reuters.com/article/reutersEdge/idUSTRE51O74H20090226
The tax-cutting phase of the “trickle down effect” seems to have been working for twenty-four years. President Ronald Reagan led off the tax-cutting era with WORLD CLASS tax cuts. But the trickle down phase does not seem to be working effectively.
The hard part seems to be persuading the rich to spend money in a “depressed” economy. The rich seems to be just as unsure about spending during a “GREAT RECESSION” as the rest of America. Some of those earning $200,000 a year were reported as being in no big hurry to spend – spend – spend, even as America’s economy “tanked”.
Off-loading the recovery of America’s economy onto the backs of the rich may not be a good idea even as the neocons like their idea of a lassie faire government.
And on President George W. Bush’s watch, America’s and the world’s economies became so bad that there were questions on the usefulness of the CAPITALISM concept.
