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Doug:

Recall though that what comes into the city or county as taxes immediately gets spent. Local governments can't run deficits, the way that the national government can. So they aren't in a strong position to provide an immediate, short-run stimulus.

Over the longer term, shifting more economic activity from the private to the public sector might reduce efficiency and growth (e.g., chase businesses away).

At the federal level, we need to look at the new stimulus packages very carefully. The country is already running an enormous deficit, which should be expansionary. The federal budget also has built-in features that will lead it to be expansionary (tax receipts will go down as incomes go down and transfer payments will go up).

I agree that this is a sad development, Doug. You are right - people already pay too much in taxes and can't afford any tax increases. The path to prosperity lies in lower taxes at all levels (federal, state and local). The best economic development package our local lawmakers could enact would be an across-the-board tax cut.

A big part of the problem is that our elected officials just can't seem to prioritize needs. Instead of making these decisions, they demand a greater and greater percentage of our hard-earned money. And I can't just blame the Democrats - the Republicans are just as guilty of allowing government spending to spiral out of control.

Cutting taxes is critical, but it's only half of the solution. The other half is cutting spending. I wish we had some elected officials who had the guts to get big government back under control.

Maybe a federal tax rebate will help ... if it doesn't go straight to state and local tax collectors.* Doug

No problem! Just have the Federal Reserve print out more paper dollars and shipped it to Iraq. Nothing like getting rid of the middle man [ local state and tax collectors] Which brings us to another economic question! Who buys the debt for the printed paper dollars? The Chinese of course and the next question should be! Where did the Chinese get the 13 trillion to cover our debt for the war?

Good post, Doug. There has not been nearly enough sensitivity to tax increases among our elected officials at the city, county or state levels. The debate is often not whether to raise taxes, but instead merely by how much.

Thanks, Joe.

I keep thinking of the economic stimulus produced by the state sales-tax holiday each August. How about Raleigh sending all of us a sales-tax rebate, offsetting it with a cut in state spending?

Honestly, I don't know whether that would produce a real economic benefit - long-term tax and spending cuts likely would be better. But it would feel good for a while.

As I've posted here before, one might consider it the function of the local newspaper to look into such matters. With property taxes, I suspect that socialist creep is more inevitable than with income taxes. But as for a broader or more specific explanation of why local taxes are always, continually, inevitably on the rise, I have no idea other than the obvious: when, in a democracy, a few are paying for the many, the many will vote in their own interests--toward higher taxes.

So, as more Americans are dropped from the tax rolls, a greater political force is created in favor of higher taxes on everybody else.

Local governments can't run deficits, the way that the national government can.* Dave Ribar

Sure they do! It happens all the time! What do you think Bond issues are? A no interest loan from the Pope?

In one pocket, out the other* Doug

Update! More like robbing Peter to pay Paul and that is not a Ron Paul constitutional policy

Evil twin:

Let's be clearer then, local governments cannot run current account deficits. While they can issue bonds for capital projects, they can only do this with voter approval.