The Tax Policy Blog

October 22, 2014

Michigan’s Senate approved a bill yesterday to extend the state’s film tax credit program, which was limited and reduced in 2011 and set to expire in 2017. It’s now up to the House to decide whether to proceed. From Mlive:

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October 22, 2014

A wealth tax would not be good for the U.S. economy.

In his book, Capital in the 21st Century, Thomas Piketty suggests a wealth tax to fight income inequality. In a recent report, we used our Taxes and Growth model to evaluate the impact of such a tax on the U.S. economy.

Piketty suggests a couple variations on a wealth tax with different rates starting a various...

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October 21, 2014

Today, the Tax Foundation is honoring six individuals with the second annual award for Outstanding Achievement in State Tax Reform. As the award’s name suggests, the honorees were selected due to their extraordinary efforts to advance the cause of simpler, smarter tax policy in the previous year.

Working for better tax policy is not easy, and although a small glass award hardly compares to the efforts the recipients put into what they helped achieve, we believe that it’s...

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October 20, 2014

The Irish Times reports that the Irish government is considering a 6.25 percent tax rate on intellectual property:

“Irish officials are examining the feasibility of a 6.25 per cent rate on a new corporate tax scheme as the Government moves to shore up inward investment after its decision to scrap the controversial 'Double Irish'...

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October 17, 2014

NPR posted an interesting breakdown of the top ten jobs for each income bracket. Here are a few interesting takeaways:

  • The top job for the top 1 percent of income earners was physicians, followed by managers, chief executives, and lawyers. These are people making over $207,000 a year.
  • The upper-middle income groups with incomes of $40,000 to $103,...
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October 16, 2014

In addition to a series of tax rate increases, 2013 also brought back a more subtle tax increase for high income earners: the Pease limitation on itemized deductions. This provision, named after the late Congressman Donald Pease, reduces the value of itemized deductions for high income taxpayers. It works by reducing the value of ...

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October 16, 2014

The Mercatus Center at George Mason University released a report this week showing that eminent domain is not worth its SALT, that is, doesn’t actually produce meaningful state and local tax revenue. Not only did the group find a lack of growth, but eminent domain actually has a slight negative relationship with revenue growth. They state:

When we expand further on the work of...

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October 16, 2014

A previous article introduced the IRS’s Taxpayer Bill of Rights and applauded the attempt to make the tax system more transparent. However, informing taxpayers of their rights and making a mindful effort to uphold these rights are separate issues. On the latter charge, it appears the IRS may have some areas for improvement.

The following list enumerates the taxpayer rights and analyzes how the IRS has upheld them in...

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October 15, 2014

[Updated 10/16/14 at 12:05 pm to include link to West Virginia Department of Revenue Administrative Notice]

Last week's action by the U.S. Supreme Court declining to hear appeals in cases regarding same-sex marriage from the Fourth Circuit, Seventh Circuit, and Tenth Circuit Courts of Appeals, along with the issuance of a ruling by the Ninth Circuit Court of Appeals finding bans on same-sex marriage unconstitutional, brought the number of states with same-sex...

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October 15, 2014

People often think of tax revenue as a function of tax rates. If you want to raise more tax revenue, raise tax rates. If you don’t want to lose revenue, don’t cut tax rates.

Reality isn’t so simple. Instead, economic growth is often the key driver of tax revenues.

The U.S. and UK Experience

A recent article in The Economist pointed out that since 1965 tax...

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October 14, 2014

Yesterday, another U.S. company announced plans to leave the U.S. via inversion in order to reduce their tax burden, according to Bloomberg:

The U.S. government’s attempt to prevent companies from seeking a tax address outside the country hasn’t stopped Steris Corp. (STE)

The Mentor, Ohio-based...

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October 10, 2014

Every year, the IRS adjusts more than 40 tax provisions for inflation. This is done to prevent what is called “bracket creep.” This is the phenomenon by which people are pushed into higher income tax brackets or have reduced value from credits or deductions due to inflation instead of an actual increase in real income.

The IRS uses the Consumer Price Index (CPI) to adjust the value of the parameters. It does this by taking the tax parameter’s base value and multiplying it by...

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October 09, 2014

Much as Senator Bernie Sanders did a few weeks ago, Thomas Hungerford of EPI is misusing government statistics to claim corporate taxes are low relative to profits. Here is Hungerford’s chart:

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October 09, 2014

A recent article on Vox, How Sweden Fights Inequality—Without Soaking the Rich, notes that countries with the most success in fighting inequality do not have highly progressive tax systems, such as the United States’ tax code. Instead, these countries, such as Sweden and Denmark, rely on much flatter taxes and use spending programs to address inequality.

The authors say...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.

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