US wealth gap putting squeeze on state revenue

[xchrom]

http://hosted.ap.org/dynamic/stories/U/US_WEALTH_GAP_STATE_REVENUE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-09-15-00-23-28


FILE - In this April 16, 2012 file photo, an Illinois Department of Revenue employee offers assistance to income tax payers at the Illinois Department of Revenue in Springfield, Ill. The widening gap between the wealthiest Americans and everyone else has been matched by a slowdown in state tax revenue, according to a report being released Monday, Sept. 15, 2014 by Standard & Poor’s. (AP Photo/Seth Perlman, File)

WASHINGTON (AP) -- Income inequality is taking a toll on state governments.

The widening gap between the wealthiest Americans and everyone else has been matched by a slowdown in state tax revenue, according to a report being released Monday by Standard & Poor's.

Even as income for the affluent has accelerated, it's barely kept pace with inflation for most other people. That trend can mean a double-whammy for states: The wealthy often manage to shield much of their income from taxes. And they tend to spend less of it than others do, thereby limiting sales tax revenue.

As the growth of tax revenue has slowed, states have faced tensions over whether to raise taxes or cut spending to balance their budgets as required by law.

[Laelth]

1. k&r for the truth, however depressing it may be. n/t

-Laelth

[dogcatdog]

2. Solution

We can drop corporate taxes to zero; Then tax all income over 1,000,000 at 90%. All income.

[el_bryanto]

4. Are corporations people in this scenario? do they get taxed at income over $1,000,000? nt

[Trillo]

3. psyop warning, "barely kept pace with"

I think shadowstats has put that lie to bed: the CPI has been manipulated (by lawmakers) to understate inflation.