This brief provides a summary and analysis of the Governor’s revenue proposals, including income, sales, and business taxes. Middle-income residents would bear the heaviest increase from the Governor’s income tax proposals, largely because of the proposed elimination of the property tax credit. Because of the Governor’s proposed state Earned Income Tax Credit, intended to provide a boost for working families and to reduce the regressive impact of sales and other tax increases, lower-income families would pay less of their income in income taxes.
While the Governor’s budget would increase state revenues, state taxes would remain a similar proportion of total personal income as in recent years. At 6.5% of total personal income, taxes would actually be at a lower proportion than before the recession started. The Governor’s business tax proposals do not include combined reporting (which would close tax loopholes that enable multi-state corporations to avoid paying corporate income taxes) or increasing oversight of the growing number of business tax credits.
