Many people are asking, “what is the most likely way that a governor would increase revenue for a new government?” At first glance, it might seem like an impossibility, but consider the various ways that our states have increased their revenue in the past. Consider the first administration of governor Jobs. He basically took over the revenue and spending of the previous administration. He eliminated all personal income taxes and raised sales tax and property tax. It was the biggest increase in the amount of revenue that had been in place since the Great Depression.
There is no doubt that it was a massive windfall for the new administration, but did end up hurting the economy in the long run. Because of this, the legislature quickly enacted more revenue raising measures and saved revenue in the process. The problem with this method was that all the revenues were already gone once the new administration left town. They came in droves and became a major problem for both the legislative leadership and the incoming administration.
Some economists are saying that perhaps the best way for a governor to increase revenue is to implement some type of income tax. This could be a combination of state income tax on personal incomes, corporate income tax on businesses, and some type of property tax. One very important thing to remember when implementing any type of income tax, whether it is a progressive or a regressive, is the need to balance the budget. If you balance the budget, then you have less risk of defaulting on the debt created by the income tax. It is also important to remember that increasing income taxes can actually reduce the amount of money that the government can borrow.
What is the most likely way that a governor would ask for a stimulus package?
They will ask for one from the private sector, most likely through a tax cut. Many corporations have gone into decline and are no longer making profit. Many of these corporations will not be able to bounce back and become a success, as they have already seen the failure of their business model. Cutting the taxes of these corporations is the fastest way to generate new jobs and economic activity.
What is the most likely way that a governor would ask for a fiscal stimulus package? Again, they will most likely request one from the private sector and again, a combination of business tax cuts and revenue increases. The argument here is that, if we give these businesses a bailout, they will then invest in more jobs, right? You are probably already familiar with the argument that the businesses were “shell-shocked” when the tax cuts took effect, but, if this was the case, why didn’t these businesses invest in more jobs before the tax cuts took effect? Because they didn’t have any money to invest, so, why did they wait until after the fact to invest?
If you are a resident of West Virginia, which is the most likely way that a governor would ask for a fiscal stimulus package, I urge you to contact your state’s senator, Jim Blaine (D Morgantown), and ask for a meeting to discuss the upcoming legislative session. Please, don’t hold this meeting yourself – contact your state senator today and ask for their help to help secure job growth in West Virginia. Your voice can make a difference!
