The Tax Policy Blog

November 01, 2007

A week ago, we first blogged on the fact that the state of Iowa had a very odd tax treatment of pumpkins whereby if they were used for consumption (i.e. pumpkin pie), you paid no tax; but if they were used for decorations or other non-food purposes, you paid the state sales tax on the item.

Well it turns out that the blogosphere...

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October 30, 2007

Last night on the NBC Nightly News, former anchor Tom Brokaw sat down for an interview with stock market mogul Warren Buffett. Forgetting the reporter's role of asking critical questions, Brokaw never once challenged anything Buffett said, even when Buffett reiterated his (false) claim that he pays a lower tax rate than his $60,000-a-year secretary.

Buffett means only to slander President Bush, but he is slandering every congress and...

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October 30, 2007

In tonight's Democratic Presidential Debate, Ohio Representative Dennis Kucinich (whose chances of winning the nomination are about the same as the Miami Dolphins winning the Super Bowl this year) made the following statement on national television: "Right now. It's all about a redistribution upwards. The tax system is about redistributing the wealth upwards. The health care system redistributes the wealth upwards. Our energy policies redistribute the wealth upwards."

Regardless of...

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October 30, 2007

An editorial in today's South Bend Tribune makes the case for property tax reform in Indiana. Unfortunately, the paper's questioning of property assessments shows a lack of understanding of basic economics. A trip to the local university for enrollment in ECON 101 may be necessary.  From the editorial:

...
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October 30, 2007

The Tax Foundation recently published Why Taxes Matter, a booklet that explains, in layperson's terms, the reasons every American should care about taxes. The booklet covers property taxes, state income taxes, taxes that affect retirement, taxes that affect business, Tax Freedom Day, and more. It ranks states on a variety of measures and can help taxpayers make informed decisions about which states to open businesses in, buy property in, or retire to.

We announced the...

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October 29, 2007

We blogged last week about the Iowa Department of Revenue's decision to impose sales tax on carved pumpkins, but not on consumed pumpkins. Whether pumpkins are taxed thus depends on the buyer's intent, which retailers were advised to "keep in mind" when selling pumpkins.

Exemptions like these increase the complexity of our tax system, which increases compliance costs, not to mention legal liability for overcharging or undercharging....

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October 29, 2007

Last Friday, the Tax Foundation held a press conference in Maryland to discuss a plan to increase taxes on Maryland's families and businesses. We released a report showing the dramatic fall Maryland would take in the State Business Tax Climate Index and the significant tax burden increase Marylanders would face if the plan was implemented...

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October 29, 2007

The Tax Foundation has put together a first look at the impact of Congressman Rangel's "mother of all tax reforms," including a summary news release, a Fiscal...

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October 29, 2007

The Tax Foundation has released a new report estimating the change in tax burden by state for tax year 2008 from Charlie Rangel's new "Mother of All Tax Reforms" bill that was released last Thursday. The study looks only at the individual tax side, which includes repeal of the alternative minimum tax (AMT) and a new surtax on high-income earners, among other provisions. The story is that there is relatively little variation among the states with regard...

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October 26, 2007

Yesterday, House Ways & Means Chairman Charlie Rangel released his long-awaited "mother of all tax reforms" (which isn't really true tax reform) that would basically raise taxes on the very wealthy to pay for tax cuts for those who are modestly wealthy (AMT class) and small tax cuts for some in the middle and bottom. But Republicans have responded by claiming it amounts to a $1.3 trillion tax hike, since that's the total amount of money raised from only the tax increase provisions in...

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October 26, 2007

7,400+ jurisdictions in America impose sales taxes, each with their own rates and laws on what's taxed and what's exempt. Many exempt groceries, for instance, but not prepared food. This bulletin from the Iowa Department of Revenue "carves" out another distinction based not on what the product is, but on "understanding":

Pumpkins: Pies and jack-o'-lanterns

The...

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October 26, 2007

In a strange political twist, Ways and Means Chairman Charlie Rangel has virtually ignored the "middle class" in the massive new tax plan he has put before the nation. In the context of a presidential campaign with candidates of both parties gushing promises of tax cuts and spending programs for the "middle class," it's almost refreshing to consider a plan that's all about the poor and rich.

Here's a Fiscal Fact that gives a...

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October 25, 2007

The ridiculous bubble-filled bracket structure of the federal corporate income tax may be on the way out (see rate table below). At least we hope so.

Ways and Means Chairman Rangel has proposed lowering the 35% corporate tax rate to 30.5%. While it's haggling over the details, Congress should reduce the table below to one rate or two at the most. At the very least, it should abolish the...

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October 25, 2007

Indiana Governor Mitch Daniels put forth his property tax reform measure Monday in an attempt to alleviate the anger of the masses of Hoosiers who are upset about their rapidly growing property tax bills. Here's a summary from the Indianapolis Star:

His proposal, which requires legislative approval, would provide about $1.billion in new property tax relief...

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October 25, 2007

From the IRS's perspective, Congress needs to do something with the AMT soon because retroactive tax legislation can have very bad consequences for tax administration. We need only look back at the fiasco that ensued last year after Congress passed the Tax Relief and Health Care Act of 2006 in December, after the IRS had already finalized and printed all the tax forms.

We wrote here about the Treasury Inspector General for Tax Administration (...

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