States Hike Taxes As Feds Cut Them

ByJohn S. McClenahen Although a number of analysts -- Merrill Lynch & Co. among them -- believe the latest round of Bush Administration tax cuts may stimulate the U.S. economy more than first estimated, tax hikes and cuts in services by state and local governments may seriously retard the fiscal impact. Merrill notes that 20 of the 50 states have already raised taxes and another 11 states have tax hikes pending in their legislatures. "State and local spending growth has stagnated and looks headed for negative territory," notes David A. Rosenberg, Merrill's chief North American economist.