Illinois continues to struggle with its budget. The state’s most recent stopgap budget expired on December 31, 2016. To perhaps break up the political logjam, Illinois senators of both political parties have begun...
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Lunch Links: House Ways and Means Approves Four Tax Bills; California Assesses Proposition 13; New Mexico Considering Tax Changes; New Fiscal Year Finds Kansas in Debt Already
Today is September 22, the birthday of California activist Howard Jarvis (1903-1986), champion of California’s Proposition 13 (1978) and namesake of the Howard Jarvis Taxpayers Association. After years of skyrocketing property tax increases, Prop. 13 immediately cut property taxes by 30 percent and capped them thereafter: property taxes are limited to 1 percent of assessed value and the assessed value can only be increased a maximum of 2 percent per year, unless a change of ownership occurs. The “California tax revolt” symbolized by Prop. 13’s passage led to similar initiatives in other states. Although there is occasional criticism of how Proposition 13 works and its lock-in effects, it remains a third rail in California politics.
Here are some interesting links I came across:
California Proposition 13 Evaluation: Speaking of Proposition 13, the state Legislative Analyst’s Office (LAO) has a study looking at the effects of the property tax cap. Local governments spend more, relying on other tax sources (including quasi-property taxes like developer fees and parcel taxes), but don’t spend as much as local governments in other states. Property tax assessments are more stable, but turnover of properties is lower than it otherwise would be. (California LAO)
U.S. House Passes Mobile Workforce Bill: The bill limits states from imposing or collecting individual income tax on people who are in the state for less than 30 days. Most states technically require such payments when someone is in the state for even a day, and even that withholding to be set up in advance. The bill, sponsored by Reps. Mike Bishop (R-MI) and Hank Johnson (D-GA), passed on voice vote after speeches in favor by Bishop, Johnson, and Rep. Bob Goodlatte (R-VA), and two speeches against by Reps. John Conyers (D-MI) and Jerrold Nadler (D-NY). It now proceeds to the Senate. (Tax Foundation)
Committee Approves Four Tax Bills: Meanwhile, the U.S. House Ways and Means Committee approved bills on nuclear production tax credits, a tax exclusion for student loan forgiveness for those in the Indian Health Service, a tax exemption for student loan discharges due to death or disability, and the tax treatment of mutual ditch or irrigation companies. (CCH)
IRS Commissioner Faces Tough Questioning: The House Judiciary Committee held an impeachment hearing on IRS Commissioner John Koskinen, with Koskinen himself answering questions for four hours. Koskinen conceded that he was wrong when he testified in June 2014 that no IRS evidence had been destroyed in the nonprofit targeting scandal. (Fox News)
Candidates’ Impact on National Debt: The Committee for a Responsible Federal Budget estimates that Hillary Clinton will bring the national debt to 86 percent of GDP, while Donald Trump will bring it to 105 percent of GDP. The debt currently stands at 77 percent of GDP, up from 64 percent in 2008 and 54 percent in 2001. (Committee for a Responsible Federal Budget / St. Louis Federal Reserve)
New Mexico Mulling Tax Changes: A patchwork of sales tax (called gross receipts tax in New Mexico) exemptions and mixed-performance economic development tax credits has New Mexico considering some changes. (Taos News)
Kansas in the Red Again: The state has a budget gap of at least $20 million, after missing both of its monthly revenue goals since the new fiscal year began July 1. (Wichita Eagle)
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