Shifting the debt burden: states may delay refunds to taxpayers

March 16, 2010

Unless they ask for a special exemption, taxpayers are required to file their income taxes by April 15.  This year, according to a USA Today report, states may not extend the same courtesy to taxpayers.

At least six states may delay paying taxpayers the income tax refunds owed to them.

Alabama, Hawaii, Idaho, Kansas, New York, and North Carolina are among the cash-strapped states considering the delay.

States’ budget problems are not the fault of individual taxpayers.  Between 2002 and 2007, politicians increased state spending 50 percent faster than the rate of inflation.  The federal government has exacerbated states’ deficits by obligating them to subsidize various spending programs.

The 50 states faced a cumulative $196 billion deficit for fiscal year 2010 and next year’s scenario looks worse.

Whether delayed tax refunds, higher taxes, or four-day school weeks, politicians would rather shift the burden on the public than make the tough choices to root out waste, fraud, and unnecessary spending in their state budgets.

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