HIGHER TAXES RECOMMENDED
IN THIS YEAR'S BUDGETS

Eleven of the 17 state budgets submitted to legislatures this year call for increased taxes, the Federation of Tax Administrators reports. In several of the remaining states, the proposed budgets were balanced through the use of cash reserves.

While state spending has tended to outstrip revenues throughout the postwar period, the present turndown in business has accentuated the need for additional revenues in budget submitted this year, the Federation observes.

Income taxes figured prominently in budget proposals. Governors in New Jersey and West Virginia recommended new income taxes. In Colorado and New York, proposals for higher income taxes took the form of a discontinuance of temporary rate cuts allowed prior years. In Maryland, a higher individual income tax was also recommended and in Rhode Island a higher corporation income tax. Kansas' governor suggested eliminating the federal income tax deduction for corporations. Accelerating tax collections by installing withholding was proposed in South Carolina and

Page 104 / Illinois Municipal Review / May 1958

Massachusetts, and expansion of the withholding device to include declarations of estimated tax by the self-employed and corporations in Colorado.

Michigan's governor favored higher taxes on intangible personal property. Sales tax increases from 2 to 3 percent were recommended by Maryland and West Virginia governors.

A cigarette tax hike was proposed in Massachusetts, and both a cigarette and liquor tax increase are before legislatures in Arizona and Rhode Island.

A new three-cent cigarette tax was passed this year in Maryland, overriding a 1957 veto.

Only one tax cut was proposed—an increase of $1 in the personal tax credit allowed Kentucky individual income taxpayers.

Page 105 / IIlinois Municipal Review / May 1958