Governing: Despite Budget Shortfalls, Some Governors Call for Tax Cuts

In both Colorado and Kansas, the tax increases would help cover projected budget deficits. That can be a dangerous habit, said Meg Wiehe of the progressive-leaning Institute on Taxation and Economic Policy, because such tax increases tend to discourage consumption.

“Politically speaking they’re low-hanging fruit,” she said. “The problem in relying on this is it is a very unsustainable increase. When you increase taxes on cigarettes, smoking declines. If the motivation is for public health, then that’s a different story. But if you’re looking to address a short, medium or long-term budget hole … it’s a bad proposition.” Read more