From the Center of Budget and Policy Priorities
- In response to the current recession, 30 states this year have enacted tax increases. Another seven states are considering similar measures.
- This response is consistent with past practices. States often reduce taxes during economic expansions and increase them during downturns. In the recession of the early 1990s, some 44 states raised taxes; in the early 2000s, some 30 states did so.
- Raising taxes can reflect sound policy judgment. Tax increases can be less harmful to families and less damaging to state economies than the likely alternative: deep cuts in services.
- Federal economic recovery funds are reducing the size and extent of state tax increases. But those funds are insufficient to avert the need for tax increases.