Plenty of New State Taxes

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The Wall Street Journal reports that at least ten states are planning major sales or income tax hikes to close budget gaps: Arizona, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Washington and Wisconsin.

The most interesting of these, I think, is Arizona -- which, in addition being one of the states hardest hit by the recession (its budget gap this year is $3.4 billion) has both a Republican governor and a Republican legislature. They are now facing off over $1 billion in proposed tax increases.

This happens because states, unlike the federal government, cannot deficit spend. And I would bet that as state tax revenues continue to tumble there will be more state-level Republicans who are willing to stomach tax increases. The breakdown of state budget shortfalls looks pretty bipartisan:

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Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.
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