November 26, 2008
Even in the World of Tax Policy, There’s Something to Be Thankful For
All year long we complain about taxes, and there's no shortage of tax-related issues to complain about. In light of Thanksgiving, however, we decided to list some tax-related things we're grateful for.
But first, some tax-related items that we think others may be grateful for this Thanksgiving (these do not all represent sound tax policy, but we suspect that each one has made some individuals or industries thankful anyway):
- Iowans who include pumpkins in their Thanksgiving decorations should be grateful that the state did away with its bizarre pumpkin tax, which was levied on pumpkins that were intended for display, but not on pumpkins that were intended for cooking. (How often have you been asked by a store cashier what you intend to do with the pumpkin in your shopping cart when you get it home?) Retailers who sell pumpkins for decoration and/or pumpkin-pie making should also be glad that they don't have to deal with this tax-induced complexity anymore. (Just when we felt safe telling Iowans they should be thankful for this improvement in their tax system, we remembered Iowa's Turkey Marketing Council, which is authorized to levy an excise tax at the processor level of up to 3 cents per turkey.)
- Minnesotans who buy their Thanksgiving turkey pre-cooked have something to be thankful for. In 1980, the Supreme Court of Minnesota ruled that sales of hot turkey and hot turkey parts in grocery stores are exempt from the sales tax. (Comm'r of Revenue v. Applebaums' Food Markets, Inc., 297 N.W.2d 141 (Minn. 1980)).
- Mississippi residents who enjoy hunting for their own turkeys, or want to ensure that others are able to do so, will be thankful to learn that for an extra $30, Mississippi will issue a motorist a special license plate identifying the driver as a supporter of the National Wild Turkey Federation.
- Here's something that preparers of Thanksgiving dinners across the country will not be thankful to read: A court in Pennsylvania does not appreciate all those cooks' hard work and culinary skill. In 1985, a Pennsylvania appeals court ruled that the "[p]reparation of potato salad, macaroni salad, cole slaw, pepper cabbage, baked lima beans, rice pudding, tapioca pudding, health salad, egg salad, tuna salad, cranberry relish, potato filling, bread filling, clam chowder, macaroni and cheese, and red beet eggs did not require the high degree of skill, science, or labor" to be considered manufactured goods exempt from the city of Reading's business privilege tax. (Van Bennett Food Co. v. City of Reading, 486 A.2d 1025 (Pa. Cmwlth. 1985)).
- Some industries that sell foods traditionally used in Thanksgiving dinners may be feeling grateful this Thanksgiving for the subsidies they receive. According to the Farm Subsidy Database, from 1995 to 2006, the following subsidies were bestowed: $56.2 billion for corn, $22.1 billion for wheat (used in stuffing), $84.9 million for lamb, and $16.5 million for potatoes.
- Everyone who pays income taxes (or cares about the effects of extremely high marginal income tax rates) should be thankful that our current rates are lower than the rates the country has faced in some years past: a top rate of 94% in1944, for example, and a top rate of 77% in 1964. (Click here for a chart of federal individual income tax rates and brackets from 1913 to the present.)
We at the Tax Foundation are thankful, of course, for all the people who support our efforts, whether through generous donations or by reading and disseminating our research. We're thankful for everyone who visits our website, reads our blog, listens to our podcasts, and makes an effort to educate themselves and others about sound tax policy.
Happy Thanksgiving.
