With lawmakers fighting to close budget gaps created by the Great Recession, some states are considering expanding their sales tax bases to include more services. (The Wall Street Journal had a good roundup of the trend yesterday.) Unlike another recent trend in state taxation - the enactment and increase of “Millionaire’s Taxes” - this phenomenon may improve state tax systems over the long term.When evaluating a proposal to expand a state’s sales tax base, we should ask two key questions: what’s being added to the base? And what will the state do with the new…
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