Tax Plan Negotiation Update

According to The Insider (a state government news service), budget negotiators are getting closer to a tax plan deal.

Budget negotiators continued pushing ahead with a $990 million tax plan that would rely heavily on a sales tax increase. Senate Democrats met this morning, emerging from the meeting still backing the plan. They released additional details: Negotiators are now in agreement on a 1-cent sales tax hike, a 10-cent per pack increase on cigarettes, a 2- percent surcharge on income tax liability, and a beer tax hike of about 5 cents per six pack. House Democrats had gone into a closed-door caucus after recessing the floor session to determine whether they have the votes to pass the plan. At least a few rural Democrats want cigarette tax hikes dropped. (THE INSIDER, 7/22/09).

So much for all that talk about "reforming the state’s tax structure" or "expanding the tax base to lower rates." Looks like budget makers are looking to finance their refusal to reform state expenditures on the backs of the poor and working class.

One prediction: if the sales tax hike ends up getting approved, look for the state to increase its Earned Income Tax Credit (EITC) to help "offset" the burden of the sale tax increase on the poor. Nevermind where the money for the expanded EITC will come from.