The Tax Policy Blog

February 17, 2009

After a decade of spending beyond tax revenues, California inched closer last week to a budget deal, as we covered here and here. The deal would raise the income, sales, gasoline, and...

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February 16, 2009

New York Governor David Paterson may have abandoned hope of enacting his tax on non-diet soda drinks, experts are still weighing in on its merits. New York Health Commissioner Richard Daines has received over 60,000 hits on...

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February 13, 2009

Here are some charts about how the California budget compromise will change some key taxes.

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Personal Income Tax

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February 12, 2009

Tomorrow begins the final round of voting on the stimulus bill, after much lively debate. Since President Obama first asked for a $300 billion stimulus bill (with a 60:40 spending to tax cuts ratio) to be ready for his signature on Inauguration Day, it's become a $789 billion compromise package. The Washington Post has an excellent visual depiction of the House-approved version,...

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February 12, 2009

The Kentucky House voted 66-34 yesterday to raise the cigarette tax by 100% and extend the sales tax to liquor sales in stores (while preserving the separate excise tax on liquor). Officials hope the increases will raise $211 million through the end of fiscal year 2010.

Notwithstanding self-serving claims...

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February 12, 2009

From the Sacramento Bee:

Multiple legislative sources said Tuesday that it would raise revenues temporarily by these means:

• Increasing the state's sales tax by 1 cent on the dollar.

• Increasing gasoline taxes by 12 cents per gallon.

• Raising the state's vehicle...

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February 12, 2009

UPDATE: Due to the Judd Gregg withdrawal story, the interview will occur on Friday.

I will be on the Cliff Kelley show (WVON Chicago) at 4:10 PM Eastern (3:10 PM Central), discussing our State Budgets report, Illinois's budget situation, and the stimulus bill.

Listen in here (left column).

...

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February 11, 2009

The town of Caddo, Oklahoma (population 944) was surprised in June 2008 when their town clerk received a $54,138 check from the Oklahoma Tax Commission. Supposedly its share of sales tax collections, it was actually an error, with the money meant for...

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February 11, 2009

Last Friday, February 6, we released a Fiscal Fact (The Tax Savings from Fiscal Stimulus) and a blog post outlining the individual income tax provisions in both the House and Senate versions of the stimulus bill. Included was a table showing what two typical families would save in taxes under each version. This table has since been updated.

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February 11, 2009

When I wrote last month about New York Governor David Paterson's plan to close New York state's $15 billion budget gap, I noted as one of its greatest strengths that it does not include any income tax increase.  New York City already has the country's highest top rate for personal income tax—10.498%—and a further increase would make the city uncompetitive at a time when it can ill afford to lose wealthy residents to other jurisdictions.

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February 11, 2009

In this edition of the Tax Policy Podcast, we continue our discussion of state budget shortfalls. Tax Foundation Manager of Media Relations Matt Moon talks with Peter Nelson, Policy Fellow with the Center of the American Experiment in Minneapolis, a nonpartisan, tax-exempt public policy organization focusing on free market ideas for Minnesota and the nation. Peter discusses Governor Tim Pawlenty's...

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February 11, 2009

While many states that have budget shortfalls are seeking federal bailouts, proposing targeted tax increases and calling for hiring freezes, these shortfalls are actually an opportunity for fundamental tax reform, according to a recently completed Tax Foundation study.

In Tax Foundation Special Report No. 164, "State Budget Shortfalls Present a Tax Reform Opportunity," Tax Foundation Director of State Projects Joseph Henchman...

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February 11, 2009

Reports earlier today indicated that California Governor Arnold Schwarzenegger and legislative leaders had reached a budget deal:

The plan calls for increasing the state sales tax by 1 percent, increasing gasoline taxes by 12 cents per gallon, raising the fee for licensing vehicles to 1.15 percent, and raising personal income tax across the board.

The Governor's office,...

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February 11, 2009

The reported stimulus compromise includes the following tax provisions:

Making Work Pay Credit: $400 for singles (phased-out at $75,000) and $800 for couples (phased-out at $150,000).

AMT Patch for 2009

Tax deduction for sales tax on new car purchases

Repayment requirement for Homebuyer Credit eliminated on homes purchased from Jan. 1 to Aug. 31

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February 10, 2009

Some state lawmakers are determined to increase the number of electronically filed state income tax returns.  Maryland legislators, in particular, are trying hard—maybe too hard?—to convince skeptical taxpayers to join the age of digital tax filing.

From the Miami Herald:

Maryland's comptroller urges "real taxpayers of genius" to file their state taxes...

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