These local stories in Louisiana, Kansas, Nebraska, and North Carolina speak quite eloquently for themselves.
Gov. Bobby Jindal is proposing to eliminate Louisiana’s income and corporate taxes and pay for those cuts with increased sales taxes
Gov. Dave Heineman made a bold proposal … end the income tax for working Nebraskans and corporations. It would also end the taxation of small business, Social Security and retirement income. … As a means to make up for the lost revenue, Heineman’s proposal would also end $5 billion in sales tax exemptions.
State personal and corporate income taxes would be eliminated, sales taxes would be charged on services, and North Carolinians would pay state sales tax on groceries under a tax reform proposal with significant support in Raleigh.
Brownback: Keep full sales tax, cut income taxes further
These proposals all lower revenues collected. This will give these red states more bargaining power when they run into the inevitable fiscal crisis, so they can suck the Federal government teat even more effectively than they do now.
Cross-posted at Asymptosis.