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Many state and local government budgets are currently under a great deal of fiscal stress, due to the current economic crisis. The State of Pennsylvania,

Many state and local government budgets are currently under a great deal of fiscal stress, due to the current economic crisis. The State of Pennsylvania, for example, has been forced to revise its budget estimates, but is still projecting a budget deficit. To change the course of this anticipated deficit, it might be necessary to consider changes to the current tax structure. One set of proponents are arguing for an across-the-board increase in state income taxes. Specifically, they are suggesting a $100.00 across-the-board increase in state income taxes for every household that resides in Pennsylvania. Highlight two (2) problems that you anticipate in regards to this proposal. Use one or more of the basic principles of taxation that were discussed in class as a framework when highlighting these problems (i.e., equity, revenue potential, economic efficiency, cost of administration, etc.)

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