Accounting Tricks Mean Less Revenue for States

It's bad enough that so many investors have watched their stock holdings tank amid revelations of fast and loose corporate accounting. Add to that another outrage: Over the past few years, the Big Five business advisory firms that have helped companies such as Enron engage in accounting gimmicks have also devised increasingly complex schemes to help corporations duck taxes.

And once again, the public is picking up the bill. That's especially true when it comes to state taxes because the Tax Reform Act of 1986 closed a number of federal loopholes once used by companies.

Tax shortfalls have become a pressing issue for states that, after years of prosperity, confront empty coffers. Now, even as corporations weasel out of taxes, lawmakers in broke states are discussing whether to approve a slate of tax hikes that hit private taxpayers. ...