Politicians in WashDC are talking about a tax cut; the question has now become its size from a couple hundred billion to a staggering $2.6 trillion over the coming ten years. All of this is based on greater revenues which the press keeps describing as larger than expected. Million, billion, trillion, gazzillion… what I find bothersome is the trend in states revenue that is going in the opposite direction - ie: less than expected.
The AP wire service had a story on 9 Feb “State Budgets Feel Economic Strain” - sorry I can’t find the link online. Maybe the Rockefeller Institute on govt has something. The AP message was: some states have to cut their budgets by up to $1b because revenues are less than expected. They noted the Rust Belt [Michigan, Ohio], the South [N Carolina, Alabama], Sluggish Farm Econ [Kansas, Wisconsin, Iowa] and for some freakish reasons for Florida and Washington State.
My questions for any economists or those who might know:
> why the disparity between govt financing?
> Will the economy benefit enough in the long run to allow a humongous Federal tax cut now which could boost the economy and continue to provide revenue surpluses?
> Will the states benefit as well?