The Tax Policy Blog

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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July 16, 2015

On Friday, Gov. Rick Snyder (R-MI) signed HB 4122 into law, officially ending Michigan’s film Incentives program effective October 1, 2016. The program, known as the Michigan Film and Digital Media Incentive, partially reimburses (up to 25 percent) eligible production companies for certain expenditures incurred while producing digital media and film projects within the state. According the...

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July 16, 2015

When Cook County, Illinois adopted a one percentage point county sales tax increase yesterday, its county seat -- Chicago -- vaulted to the top of a dubious list: major cities with the highest sales tax. Including state, county, city, and public transit sales tax impositions, Chicago's combined sales tax will return to its former high of 10.25 percent as of January...

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July 14, 2015

Today, Jason Fichtner and Adam Michel at the Mercatus Center released a paper on the research and development tax credit. The R&D tax credit is one of the larger components of the federal “tax extenders,” a host of credits and deductions that are temporarily reinstated each year, ...

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July 14, 2015

Last week, we published a map showing how far $100 would take you in different states. For example, in states with low costs of living, like Mississippi, $100 had the same sort of purchasing power that $115.74 would have in an average state.

But what about the differences in purchasing power within a single state? Do people in Austin have the same purchasing power as those in Dallas? And of course, how does...

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July 14, 2015

The Greek Prime Minister, Alexis Tsipras, agreed to a bailout deal over the weekend. As with previous proposals, the deal included a mixture of spending cuts and tax reforms, but the latest deal shows that the Eurogroup understands the elements that underpin economic growth. Unlike previous proposals, the tax reform component of the deal called for “...

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July 14, 2015

Yesterday we wrote about a proposal from Representative Tom Rice (R-SC) that would raise the gas tax by 10 cents and adjust it for inflation going forward in order to close Highway Trust Fund’s ongoing deficits. The plan would also not raise taxes on net by offering a $133 per-person income tax credit. Although it is a reasonable way to fix the Trust Fund’s shortfall, it faces political difficulties....

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