The Tax Policy Blog

August 08, 2014

The American Legislative Exchange Council recently released a report on the unseen costs of tax cronyism that offers for the first time a number figure on how much states give away in tax favoritism per year.

The report finds that states awarded $220 billion for personal income and business earnings exemptions and $260.1 billion in sales tax exemptions. These figures don’t even include tax breaks for individual...

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August 07, 2014

Per a Politico report, President Barack Obama says he will act on inversions:

“Obama has asked Congress to address the practice, known as inversions. However, he made clear Wednesday that he also plans to take whatever unilateral steps he can to rein in the phenomenon.

“What we are doing is examining: Are there elements to how...

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August 06, 2014

Big news out of Michigan: voters yesterday approved Prop 1, a personal property tax cut that will amount to about $500 million per year on net.

While individuals only pay property taxes on their real estate, businesses in many states have to pay an additional tax on all of their property that can be touched and moved—from staplers to desk chairs to manufacturing equipment. We’re...

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August 06, 2014

We’ve had a tremendously successful year here at the Tax Foundation, and we want to share our successes and progress with you. Even though our Weekly Newsletter covers our most popular releases, it doesn’t offer any insight to our work on the ground, traveling around the country and speaking with legislators, business owners, and taxpayers about the importance of well-structured tax policy.

In order to fill you in on the weekly happenings here at the Tax Foundation, we are excited to...

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August 06, 2014

Since the 1940’s the United States has relied most heavily on the individual income tax, which accounts for 40 to 50 percent of total federal revenue. Income is currently defined as consumption plus change in net worth – also known as the “Haig-Simons” definition of income. This definition of income leads to the double taxation of...

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August 06, 2014

If there is one thing that Americans are not good at it is learning lessons from the experiences of other countries. We tend to look upon issues and events as unique to the American experience and struggle to find our own solutions, often failing to realize that other countries have suffered similar problems and have already discovered viable remedies.

So it is with the latest “wave” of corporate inversions. To read this morning’s latest article on...

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August 05, 2014

In recent weeks there has been an excessive amount of hand-wringing and gnashing of teeth about corporate inversions. The comments range from the White House calling these companies unpatriotic to reporters claiming that inversions are eroding the corporate tax base.

It is time for a little perspective.

First, while the number of companies moving their headquarters abroad has increased in recent...

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August 05, 2014

This week’s tax map takes a look at when each state first adopted its distilled spirits excise tax, if it has one. Federal taxation of alcohol dates back to the earliest years of the republic but state excise taxes all followed swiftly on the heels of the Twenty-first Amendment. With the end of federal alcohol prohibition in 1933, states retained the authority to permit or prohibit alcohol...

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August 04, 2014

Recently, Congress and the media have been abuzz over “corporate inversions.” Some worry that the recent wave of inversions will harm the U.S. and its tax base. Others point to them as evidence of a broken U.S. corporate tax code.

In order to help you sort through the chatter, here are some common questions and answers about corporate inversions, how they interact with our tax system, and why they matter:

What is an inversion?

In its simplest form, an...

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August 04, 2014

The IRS last month posted drafts of its new forms for the 2014 tax year. These should by no means be considered complete – Congress can often keep meddling with the tax code deep into December – but looking at the draft 1040 can remind us of the changes ahead. Here are four lines from the 2014 1040 that reflect changes.

Expiring Provisions:...

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August 01, 2014

The oil and gas boom of the past 5 years or so is widely seen as the brightest spot of an otherwise moribund U.S. economy. In fact, a group of economists from Purdue University recently found that without this boom the U.S. economy would still be in recession. Likewise, employment in the oil...

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July 31, 2014

Tomorrow is the deadline to apply for a fall 2014 internship at the Tax Foundation!

While there are a number of Washington, D.C.-based public policy groups today that cover a broad range of policy issues, only the Tax Foundation provides a principled voice on the impact of tax and fiscal policy at the federal, state, and local levels. We offer a unique internship program designed to introduce...

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July 31, 2014

This fall, the U.S. Supreme Court will hear Maryland v. Wynne, which asks whether Maryland must provide a credit against local income taxes for income taxes paid to another state. The taxpayers in the case, Mr. and Mrs. Wynne, own 2.4 percent of a company doing business in 39 states. As Maryland residents, they paid $123,434 in income tax to Maryland, after applying a credit of $84,550 for taxes paid to other states on income earned outside...

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July 30, 2014

When considering a lower tax rate we can make one of two assumptions. We can assume that changes to taxes rate will not change behavior, or we can assume that changes to tax rates do change behavior.

We know that taxes do alter behavior. In Washington, DC, we see it on a small scale every day when people decline a plastic bag at the grocery store because of the 5 cent bag tax. When we see people make such a decision over 5 cents, we know that major tax changes can have large impacts...

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July 29, 2014

29 Democratic members of Congress from California today urged California to make its film tax credit more generous. A bill to do so, AB 1839, has passed the state Assembly and is pending in the Senate.

California has seen billions of dollars of film and television productions flow out of Hollywood to Canada, New York, Louisiana, Georgia, and other places, due to these governments providing some $1.5 billion annually in refundable and transferable tax credits (direct subsidies in all...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official weblog 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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