Director of Tax Research & Compliance at Avalara – Malthus Again?

Stumbled onto a 12/2009 report written by Phil Schlesinger that’s on CCH’s website (another Certified Solutions Provider) that is absolutely Malthusian.  For those who aren’t Econ geeks or didn’t major in Economics, Thomas Malthus wrote a paper on population growth and did straight-line extrapolations, showing doom and gloom based on these assumptions.  From wikipedia: “Malthusian terms can carry a pejorative connotation indicating excessive pessimism and inhumanity.”

As everyone knows, we entered a recession.  So it’s not surprising that sales tax revenue declined, as did personal income tax and corporate income taxes.  This December 2009 white paper in mainly about the gloom and doom projections going forward.

“The goal of this whitepaper is to present credible and timely data

that helps to articulate, both in quantitative and practical terms,
the depth of the situation that most states find themselves in,
both presently, and for the foreseeable future. Additionally, we will
examine how states will likely deal with their financial woes, and
some of the measures that states have already taken to generate
additional revenue. Our analysis is limited to revenue shortfalls
related to transactional taxes such as sales and use tax.”

At the end: “The goal of this whitepaper

was to create for the reader
a fairly realistic view of the
landscape as seen from the
eyes of the struggling states.
For many states, the picture is
very grim and could take years
to rebound from the current
economic downturn. Whether
popular or not, states will
have cut costs and generate
additional revenue.”

Quoting from Scott Pattison, executive director of the National
Association of State Budget Officers, her article includes the
following statement: “This is an awful time for states fiscally, but
they’re even more worried about 2011, 2012, 2013, 2014.”

Sales tax revenues of course, stabilized according to US Census figures at governing.com.  2010 sales tax receipts were roughly flat or slightly lower than 2009.  Since then:  Rising every year, with 2012 revenue higher than 2008 and significantly higher than the 2009/2010 lower points.  And as mentioned in our previous Myth of Declining Sales Tax Revenues posts, virtually all states project sales tax revenue increase for 2013 vs. 2012.

Economic recovery will do far more for states’ budget health than implementing new taxes, especially those based on wildly optimistic projections of sales tax revenue it would bring in.

 

Link to CCH’s whitepaper from 12/2009 (PDF)

 

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