In a new issue brief, Kitty Richards explains why—and how—states must move now to protect their residents and economies, including by:
- Enhancing income taxes;
- Recapturing federal giveaways to the rich;
- Raising corporate tax revenues;
- Reforming wealth taxation; and
- Modernizing consumption taxes.
As state and local governments face unprecedented revenue shortfalls over the next three fiscal years, many are considering slashing services and public sector employment at exactly the time they are needed most.
These moves have the potential to devastate communities and local economies, causing unnecessary hardship, deepening the recession, and hampering the eventual economic recovery. The federal government should step in immediately, using cheap federal borrowing to support state and local governments—just as the recently passed House stimulus bill (the HEROES Act) would do. But states and localities should also move quickly to stave off cuts and expand services and employment by raising revenue progressively.