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'Common sense' politics: Republican governors propose raising taxes

A handful of Republican governors are going against the party hardline, proposing tax increases in their states, according to a report in The New York Times. Republican governors are now in office in 31 states, and at least eight of them are saying they need to raise taxes based on budget shortfalls and demands from constituents who have waited out years of budget cuts.

States including Michigan, Utah, South Carolina and South Dakota all have tax hike proposals on the table. In Michigan, for example, there is a proposal to raise the sales tax and the gas tax. “It’s not based on partisanship; it’s based on common sense and good government,” Republican Governor Rick Snyder of Michigan tells The New York Times. “We’ve been underinvesting in Michigan for some time, so I view it as a way to, long term, save us resources.” Snyder will introduce a ballot measure that would raise $1.9 billion.

Raising the gas tax is on the table in South Carolina and South Dakota as well. Utah is looking to tax e-cigarettes. In Arizona, newly-elected Governor Doug Ducey has backed off a campaign promise to eliminate the state’s income tax. The state is seeing a $1 billion budget shortfall and income tax makes up about one-third of the state’s budget.

“This is so encouraging,” says Yahoo Finance’s Henry Blodget. “It’s practical. It’s the right thing for the country. They’re bucking just the absurd black-and-white approach this party has taken over last really decade at this point.”

But many of these proposals face an uphill battle. Many Republican lawmakers on the state and federal level ran on a platform of "no new taxes," and have signed onto Americans for Tax Reform's Taxpayer Protection Pledge. In signing the pledge, candidates and incumbents declare they oppose "any and all tax increases."

However, such a binding pledge is difficult for governors because, unlike the federal government, states are required to balance their budgets. Nonetheless, Republican-led state legislatures, toeing the party line, will likely vote down many of these proposals, including an increase in the gas tax even as prices have dropped to their lowest level in years.

Earlier this month, House Speaker John Boehner, R-Ohio, said he doesn't think there is enough bipartisan support to raise the federal gas tax. The federal tax has been 18.4 cents per gallon since 1993.

Blodget says the hardline is ridiculous. “No one is going to suggest that you immediately raise the gas tax $2 tomorrow, out of the blue, totally blindside every body,” he says. But legislators should “take this opportunity to say, ‘Okay, we survived at $4 a gallon.' The country worked. Everybody started buying Priuses. Everything began to change,” says Blodget.

But change is a difficult thing particularly when it comes to taxes. The Times report points out that Republican governors in states like Arkansas, Mississippi, and Nebraska are actually proposing tax cuts. And in several states with Republican leadership like Illinois and Maryland, raising taxes is not on the table despite serious budget shortfalls.

Blodget says the fact that the GOP governors are proposing tax increases in the face of opposition is encouraging though-- especially after years of political gridlock in Washington. “I am seeing in all of this Republicans finally willing to cross the party line. And that’s good for all of us.”

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