The Tax Policy Blog

September 23, 2014

A new bill from Representative Scott Peters of California would exempt some small businesses from quarterly tax payments. Currently, most businesses must send quarterly returns based on estimated tax to the IRS. This is a prudent piece of legislation that will reduce administrative costs and promote some growth, with virtually no downside.

The bill makes no change to actual tax owed. Instead, it just exempts...

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September 22, 2014

The Tax Foundation’s International Tax Competitiveness Index ranks the United States tax code 32nd out of 34 OECD countries. An obvious question to ask, then, is why the U.S. remains so wealthy, and so successful at creating new businesses.

A report from Harvard Business School – a survey on U.S. competitiveness...

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September 22, 2014

Representative Chris Van Hollen (D-MD) has introduced a bill called the “CEO-Employee Pay Fairness Act.” This bill would prevent a corporation from deducting the cost of compensating CEOs if the corporation did not raise the wages of all employees that earned less than $115,000 by a specific formula based on inflation and productivity growth.

In his press release, he argues that the...

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September 19, 2014

A group of professors recently released a study that finds insufficient discussion of the total cost of taxes in public finance textbooks. They find that common textbooks fail to fully include the total cost of taxes into discussions of public goods and cost-benefit analyses. I quote the abstract of the paper in full:

“Taxation...

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September 19, 2014

Recently, Senator Chuck Schumer (D-NY) released a bill that would retroactively change interest deduction laws and ownership requirements for inverted companies going back to 1994. We’ve discussed how this is an attempt to fix a problem that only sound tax reform can solve, but the bill’s retroactivity is also bad policy.

...

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September 18, 2014

Today the U.S. House of Representatives debated H.R. 4, the Jobs for America Act. Among addressing multiple issues, the bill would make permanent Section 179 small business expensing, 50 percent expensing, and repeal the medical device tax. Each of these provisions would move the tax code in the right direction.

Section 179

For a business...

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September 18, 2014

Senator Bernie Sanders recently said this about U.S. corporate taxes:

"Want to better understand why we have a federal deficit? In 1952, the corporate income tax accounted for 33 percent of all federal tax revenue. Today, despite record-breaking profits, corporate taxes bring in less than 9 percent. It’s time for real tax reform."

...

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September 18, 2014

In our new International Tax Competitiveness Index, the United States ranks 32nd out of the 34 countries in the OECD. This puts the United States behind countries such as Spain and Italy and just in front of Portugal and France.

There are a few main drivers behind the U.S.’s low score in the ITCI. There are the obvious ones: the U.S. has the developed world’s highest corporate tax...

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September 18, 2014

This week's map shows the state sales tax rate, plus the average local rate, for each state as of July 1, 2014. This data comes from a bi-annual sales tax report we released yesterday which details each state’s statewide sales tax rate, along with its maximum and average local sales tax rates.

Tennessee has the highest average combined rate at 9.45%, and is followed closely by Arkansas (9.24...

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September 16, 2014

One of the worst aspects of the federal tax code is the way it treats saving. Under ordinary circumstances, saving is treated to double taxation at the individual level, reducing after-tax returns to saving and incentivizing immediate consumption over saving.

There are several ways, though, that the tax code relieves this undue burden. Traditional IRAs, Roth IRAs, defined-benefit pensions, and 401(k) plans are some of the most common. Each of these is (rightly) subject to only a...

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September 16, 2014

A new report by Standard & Poors finds that rising income inequality may negatively impact state revenue growth. The report confirms the long-standing consensus of tax economists that high, progressive income taxes contribute to revenue volatility, and also confirms the growing chorus of experts...

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September 12, 2014

The latest advertisements on behalf of Larry Hogan, the GOP candidate for Maryland’s Governor, have focused on tying his opponent, Lt. Governor Anthony Brown, to the tax policies of Governor Martin O’Malley (D). In his tenure as Governor, O’Malley has ...

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September 11, 2014

Over the years, the tax code has been altered by changes to statutes, regulations and case law, adding up to over 70,000 pages of instruction to filing taxes. It is the IRS’s job to enforce tax policy, so they keep track of the time and cost of filing taxes for individuals and businesses.

...

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September 11, 2014

On the heels of a poor jobs report—but another drop in the unemployment rate down to 6.1 percent—Adam Hartung published in Forbes a piece titled “Obama Outperforms Reagan on Jobs, Growth, and Investing.”

In the article, Hartung leads with the unemployment rate as his metric to prove President Obama’s success on the job front as compared to President Reagan.

...

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September 11, 2014

Majority Leader Kevin McCarthy recently sent a memo to the House of Representatives indicating the agenda for the fall session. In his memo, he advocates for an, “honest, simple and effective” approach to government, and bundles up previous jobs and tax bills into his economic package for the fall.

Key tax and job highlights of the package include:

  • ...
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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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