Tax Policy

Inflation-adjusted gross domestic product grew 1.9 percent in the United States during 2013, which is somewhat lower than long-term expectations for economic growth. Employment rose a relatively healthy 1.6 percent, but nearly 1.2 million fewer people have a job than before the recession. Most analysts expect better GDP growth during 2014 and anticipate employment will finally rise above the pre-recession peak sometime during the second half of 2014. Economic growth will improve because the short-term drag caused by sequestration and the debt ceiling debate has played through the economy, improvements in household balance sheets are allowing solid consumer spending increases, business investment is rising with better business equipment purchases and housing construction is healthier in many regions.

The CSG West Fiscal Affairs Committee provided a forum for chairs and members of budget, appropriation and revenue or tax committees in Western legislatures to exchange ideas and experiences on issues affecting state budgets. The committee addressed fiscal issues associated with the impact of the recession, state fiscal trends, taxation, business incentives, revenue forecasting and performance-based budgeting.

For every two packs of cigarettes sold in New York, at least one has been illegally smuggled into the state. That’s according to research by the Mackinac Center for Public Policy, which also reports that cigarette smuggling cost states an estimated $5.5 billion in lost revenue in 2012. “The significance of the problem cannot be overstated in high-tax states,” said Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center.