This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

State Tax-cut Plans Tempered By Caution In 2013

By DAVID A. LIEB

JEFFERSON CITY, Mo. (AP) â¿¿ Emboldened by big majorities and eager to lure businesses, Republican legislators and governors across the Midwest and South are planning to pursue hundreds of millions of dollars of tax cuts in the new year.

Oh yeah, they might raise some taxes, too.

In many states, the exuberance to cut taxes during the 2013 legislative session suddenly has been chilled by worry about the potential consequences. Cautious state officials are now talking about the need for "thoughtfulness," warning that they'll "have to see how their numbers work out" and suggesting that tax cuts in one area may need to be offset with increases in another.

The change in tune comes as Republicans struggle to balance a core belief in lower taxes and bold campaign promises against the practical need to pay their government's bills. Political obstacles are less of a problem. A party that swept into power in many statehouses in the 2010 elections won even bigger majorities in 2012.

The case study for the new mood â¿¿ caution mixed with conflicting impulses â¿¿ is Kansas. The Republican-dominated state slashed income taxes in 2012, enough to save taxpayers a projected $4.5 billion over six years. Now it's facing a self-inflicted budget gap of roughly $300 million for the fiscal year that starts July 1 and wrestling with whether to cut services or extend a sales tax hike that is scheduled to expire. In neighboring Missouri, Republican supermajorities in the Legislature are under intense pressure to pass their own tax cuts out of fear that businesses and employees will flow across the border.

"We don't live in a vacuum. It is ever more pressing that we are responsive, because other states are being much more aggressive than the state of Missouri is," said incoming Senate President Pro Tem Tom Dempsey. But he added: "This philosophy of, 'OK we'll cut the taxes and people will come' â¿¿ it takes a lot more thoughtfulness."

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs