The Tax Policy Blog

July 31, 2015

Yesterday, the Senate approved a three month extension of the Highway Trust Fund. The bill, called the Surface Transportation and Veterans Health Care Choice Improvement Act, would fund the Highway Trust Fund until October 29th by moving $8 billion dollars from the general fund. It would pay for the shift with several administrative and compliance changes to existing taxes (overview here).

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July 31, 2015

501(c)3 charitable organizations collected $1.73 trillion in revenue in 2012, according to statistics released by the IRS on Wednesday.

This figure represents the highest level of revenue ever received by charitable organizations, up from $1.65 trillion in 2011. Charitable organizations now make over three times as much revenue as they did in 1985, with revenues growing by an...

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July 31, 2015

This week, Representatives Charles Boustany (R-LA) and Richard Neal (D-MA) introduced a discussion draft on the “Innovation Promotion Act of 2015.” This act would introduce what is called an “innovation box,” or patent box to the U.S. tax code.

Simply put, a patent box provides a lower tax rate on income related to intellectual property. Its stated goal is to promote research and development in the United States.

How Would the Patent Box Work?

The...

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July 30, 2015

This week’s map is a GIF showing the year each state adopted its gasoline excise tax. Oregon was the first state to do so in February of 1919 (Colorado, New Mexico, and North Dakota also enacted them later in the year). By 1929, every state in the union at the time had enacted a gas tax (Hawaii and Alaska had not yet gained statehood at this time).

(Click on the map to enlarge it. Reposting policy)

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July 30, 2015

“No Car Tax.” As political slogans go, Virginia Governor Jim Gilmore’s 1997 cri de coeur was admirably clear. No vague, aspirational statements about renewing, reclaiming, or reviving anything; just: the car tax must go.

Gilmore’s anti-car tax campaign was a political masterstroke, and in his first year in office, he secured passage of legislation phasing out the widely despised tax over five years. But Eighteen years later, with Gilmore...

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July 28, 2015

Democratic presidential candidate Hillary Clinton has proposed a change in the top capital gains tax rates. Under current law, such capital gains have a two-tiered structure: short-term gains face a top rate of 43.4 percent (including the 39.6 percent statutory rate plus the 3.8 percent investment income surtax) and long-term gains, defined as those with a holding period of more than a year, face a reduced tax rate of 23.8 percent (20 percent statutory rate plus the 3.8 percent surtax)....

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July 27, 2015

After a year of parliamentary debates the French Parliament adopted an Energy Transition for Green Growth plan on Wednesday the 22nd of July. As part of this plan the carbon tax will almost quadruple for the current rate of €14.5/tCO2 to €56 by 2020 and...

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July 24, 2015

Greece’s economic problems began long before the current debt crisis. In 2009, the Greek deficit was approaching the EU limit of 3% of GDP. Fearing economic sanctions by the EU, the Greek government passed tax increases to reduce deficits.  One of the tax increases was a 10% surtax on corporate income known as a special extraordinary contribution on corporate profits. The result was a mass exodus of businesses that...

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July 24, 2015

If you desire to travel in interstate commerce, first you must let go of the rope. That, at least, is the conclusion of the Missouri Department of Revenue with regard to the applicability of the state's sales tax to tethered (taxed) and untethered (untaxed) hot air balloon rides. The Missouri ruling is neither surprising nor unprecedented, but it's a...

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July 23, 2015

This week’s tax map takes a look at state gasoline tax rates, using data from a recent report by the American Petroleum Institute. Pennsylvania has the highest rate of 51.60 cents per gallon (cpg), and is followed closely by New York (45.99 cpg), Hawaii (45.10 cpg), and California (42.35 cpg). On the other end of the spectrum, Alaska has the lowest rate at 12.25 cpg, but New Jersey (14.50 cpg) and...

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July 22, 2015

There has been some confusion over the tax changes required by the Eurogroup as part of the Greek bailout deal. As we understand, only the broadening of the Value Added Tax (VAT) is required to satisfy the Eurogroup demands.

The specifics of the VAT base broadening were announced on Monday. The VAT rate was increased for many goods and services with special rates, but the standard...

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July 22, 2015

Earlier this week I gave a talk on the economic benefits of fundamental tax reform. I’ve included a link to the slides that accompanied my remarks at the July 20th event. Here are some key points:

  1. The income tax falls more heavily on income used for saving than on income used for consumption.
  2. It is important for people to use retirement...
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July 22, 2015

Yesterday, the Senate Committee on Finance met to consider a bill that would renew over 50 recently expired provisions of the tax code, commonly known as tax extenders. By a 23-3 vote, the committee approved the measure, which would extend these tax provisions until the end of 2016,...

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July 21, 2015

Recently, Republican Presidential hopeful Jeb Bush claimed that it only takes 5 minutes to file taxes in Estonia. This claim was confirmed by a number of reporters and tax authorities in Estonia.

For those of us that do our taxes by hand, this sounds like a dream. Depending on your situation, filing your taxes can take a significant amount of time...

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July 21, 2015

With Chicago set to impose the highest combined sales tax rate of any major city as of January 2016, many people want to know how their city ranks. Last week, I set out a list of the 15 cities with the top sales tax rates, but many of these cities are on the small side: Birmingham and Mobile, for instance. Not until Seattle, with the seventh-highest rate among American cities, does one encounter...

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