The Tax Policy Blog

January 31, 2008

This month the Heritage Foundation and the Wall Street Journal released the 14th edition of the Index of Economic Freedom, a publication that ranks countries on nine measures of economic freedom: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption, and labor freedom.

The U.S. ranks...

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January 30, 2008

The stimulus package just passed by the House and now under consideration by the Senate, is designed as a 2008 tax cut, with part of the refund you would normally get in spring 2009 advanced to be mailed out this spring ($600 under the House, maybe...

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January 30, 2008

The Senate will likely cave to the demands of AARP and others to expand the stimulus to include rebates to elderly Americans who pay little or no taxes (and the rebates dropping from $600 to $500 to keep the cost the same). As we noted:

When dealing with a policy that is designed primarily to stimulate the economy, any arbitrary policy can almost be justified to some degree. But what this shows is that there is a problem in trying to...

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January 29, 2008

According to the Atlanta Journal-Constitution:

Rep. Chuck Martin (R-Alpharetta) is pushing legislation co-sponsored by leaders of both parties to make sure Georgians don't have to pay state income taxes on the stimulus checks they might be receiving from the federal government.

The final stimulus plan hasn't been approved by Congress...

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January 29, 2008

In a rush to relieve Virginia motorists of steep "abusive driver fees," state legislators have run head-on into a 130-year-old Virginia State Supreme Court case that is thwarting their attempts. The controversial law passed last year requires drivers charged with abusive driving to pay heightened charges (taxes) to the state. They are currently charged in three installments over the space of three years and...

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January 29, 2008

In this week's edition of The Onion, their weekly "interview" of guests on the street asks the question "Congress agreed on an economic stimulus package that would give individual taxpayers a rebate of up to $600. What do you think?"

Our favorite response was from Neville Head, who is a dog trainer:

"I hope buying $600 worth of waffles helps the economy, because that's what I'm going...

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January 29, 2008

The anti-property tax fervor that has swept the nation over the past couple of years has registered another victory. This time it was in the State of Florida. On Tuesday night, the voters approved Amendment 1, a measure that would scale back property taxes in the Sunshine State, mostly on primary homes. This was in addition to the property tax cut that the state legislator and Gov. Crist put into law in 2007. For more on the vote, here is an...

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January 28, 2008

As many states continue debating the issue of cutting of property taxes while raising other taxes, a friendly reminder to policymakers and voters on the public finance of property taxes: there is no such thing as a free lunch. How to provide property tax relief can basically be summed up in one simple equation:

Local Property Tax Burden  =    Level of Local Government Services   X    Cost Per Unit of Local Government Services    X    Local Share of Financing Local...

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January 28, 2008

In tonight's State of the Union Address, President Bush proposed the right prescription of short-term stimulus to calm American's economic jitters in the near term and long-term confidence-building by challenging Congress to make his signature tax cuts permanent.

But the President missed a golden opportunity to use his bully pulpit to jump-start the debate over the nation's lagging business tax competitiveness in the global economy. With the second highest corporate tax rate among...

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January 26, 2008

You knew it was coming. It was only a matter of time before one of the biggest interest groups in the country weighed in on the fiscal stimulus agreement reached between the White House and the House leadership. The AARP is pressuring senators to expand the fiscal stimulus so that more money can go to senior citizens who don't pay income taxes. The stimulus already includes money for those who work yet pay no...

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January 25, 2008

Regardless of whether one supports a stimulus package, the agreed-upon package by the House leadership and the White House could almost rival AMT in terms of the amount of complexity it adds to the 2008 tax system. Not only do we have the government sending out checks to those who have no income tax liability (thereby requiring some method to reduce their tax liability), the proposal calls for yet another child tax credit. Yes. Make it three child tax credits.

We have the regular...

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January 25, 2008

"Why does a slight tax increase cost you two hundred dollars and a substantial tax cut save you thirty cents?"
            —Peg Bracken

"The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."
           — Jean Baptiste Colbert, Minister of Finance under King Louis XIV of France

"A fine is a tax for doing something wrong. A tax is a fine for doing something right."...

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January 24, 2008

Based on the reported agreement between House Speaker Pelosi and House Minority Leader Boehner, it is apparent that fiscal stimulus may not be provided as the much touted tax rebates, but instead as simple cash payments to most working Americans. The cash payments would be set at $600 for individuals, $1200 for married couples who pay income taxes. Workers with at least $3,000...

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January 23, 2008

An editorial in yesterday's Investor's Business Daily argues that the income tax code has become more progressive in recent years, not less, citing Tax Foundation research that a growing number of Americans pay no income taxes at all:

Republicans say the rebates should go to taxpayers only—which makes sense, since they are "tax" rebates....

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January 23, 2008

Following the president's news conference outlining his thoughts on fiscal stimulus, Senator Hillary Clinton released a statement saying, among other things:

"For the White House to propose spending over $100 billion to jumpstart the economy, while shortchanging assistance to the 50 million families who are struggling the most and are most likely to inject those funds into the economy makes no sense...

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