States Enjoy a Brief Revenue Surge as People Race To Beat Higher Rates
Which officials will spend, of course
When filmmaker George Lucas sold his company and the Star Wars franchise to Walt Disney Co. this fall, he saved hundreds of millions of dollars in state and federal taxes by not waiting until next year when higher tax rates are anticipated. He's hardly alone.
Regardless how or even if Congress and President Obama avert the series of federal tax increases and spending cuts set to occur in January, known as the "fiscal cliff," many states could see wild swings in revenue as taxpayers decide to sell investments before the end of the year.
"You change taxes and you change people's behavior," says Donald J. Boyd, executive director of the Task Force on the State Budget Crisis, created by former Federal Reserve Chairman Paul Volcker and former New York Lieutenant Governor Richard Ravitch.