The Tax Policy Blog

August 15, 2008

With complaints of high property taxes in NY, Gov. David Paterson has proposed limiting property tax increases to 4 percent per year. However, the plan has some politicians and voters worried that schools will no longer receive adequate funding. Another bill recently introduced in the NY legislature is meant to help schools avoid cutting their budgets. The Educational Tax Incentives Act would...

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August 15, 2008

Earlier this week, Maine politicians reacted with surprising unanimity to the Tax Foundation's new State & Local Tax Burdens report.  Governor John Baldacci (D) and Republican and Democratic leaders in the state legislature all acknowledged that Maine's personal income tax, with a rate that tops out at 8.5%, is too high and needs to be cut.

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August 15, 2008

One feature of the Obama tax plan that is beginning to get more attention is the high tax rates that will be imposed on those with high incomes. A simple back-of-the-envelope calculation gets one to a nearly 50-percent tax rate, rates that have not been seen since before the Tax Reform Act of 1986.

The calculation is straightforward: Obama's 39.6 percent top income tax rate plus the 2.9 percent Medicare tax rate plus his additional 2-to-4 percent hike in the Social Security tax rate...

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August 14, 2008

Today is the 73rd birthday of the Social Security system in the United States. Signed into law in 1935, the first payroll taxes were collected in 1937 and the first payment made in 1940. Although initially the system was designed to pay out benefits from a reserve fund, it was changed in 1939 to "pay-as-you-go"—payroll taxes that are collected are immediately paid out to current retirees. Taxes are split, with half deducted from employee paychecks and the other half paid by the...

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August 14, 2008

This November, Colorado voters will decide Amendment 51, which will raise the state sales tax from 2.9% to 3.1% over two years. The estimated $186.1 million per year raised by the tax increase would be dedicated to services for the developmentally disabled.

More on Colorado here.

August 14, 2008

In an op-ed in this morning's Wall Street Journal, Obama economic advisors Austan Goolsbee and Jason Furman make this claim:

"In contrast (to Obama's plan), Sen. McCain's tax plan largely leaves the middle class behind. His one and only middle-class tax cut -- a...

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August 14, 2008

Gov. Ed Rendell of Pennsylvania says that his state needs $1.7 billion to repair and maintain the state’s transportation system. So far a few proposals for raising the funds have surfaced. One idea that is receiving much support from authorities is to place tolls on I-80, the interstate highway that runs east and west across the center of the state. Another option under consideration is a 75 year lease of the...

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August 14, 2008

As stated in an earlier blog, Chicago recently increased local sales taxes, making rates in the city 10.25%. The rate, which is the highest in that nation, may soon rank second to Los Angeles.  The current sales tax in Los Angeles is 8.25%, which breaks down as follows:

6.25%  State sales tax
1.00%  State mandated local sales tax (which funds, in part, local government)...

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August 14, 2008

In an editorial posted on its website, the New York Sun argued that Sen. Barack Obama is waging a “war on women,” partly due to his tax policies. The paper says the following:

Meanwhile, the most astonishing sentence in the op-ed (referring to Furman/Goolsbee op-ed) is this one: "His plan would not raise any taxes on couples making less than $250,000 a year, nor on any single person with income...

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August 14, 2008

Today's Wall Street Journal op-ed by Senator Obama's chief economic advisors, Jason Furman and Austan Goolsbee, outlines much of the senator's tax platform and makes a number of claims that are not completely consistent with the evidence or the facts. Just a few points:

  • Top tax rate: Senator Obama would raise the top individual tax rate back to 39.6 percent,...
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August 14, 2008

The Furman-Goolsbee WSJ op-ed which my colleague Bob discusses below provides a general overview of the Obama tax plan, and as he notes, it leaves some unanswered questions about the proposals it discusses.  It also entirely omits mention of two significant Obama tax proposals...

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August 13, 2008

Yesterday we criticized the errors in an Associated Press story about a recent report issued by the Government Accountability Office (GAO), which found that many U.S. corporations had no corporate tax liability from 1998-2005. The study had been requested by Sens. Carl Levin (D-MI) and Byron Dorgan (D-ND), who immediately seized it as evidence of widespread corporate tax evasion:

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August 13, 2008

On Townhall.com yesterday, Michele Bachmann wrote a blog post that implied correlation between those states whose Tax Freedom Days were later in 2008 with the existence of Right to Work laws in a state. Such an analysis, unfortunately, misses the point.

Don't get me wrong. There are legitimate arguments to be made against many labor market regulations. (There's no such thing as a free lunch.)...

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August 13, 2008

Tax Foundation President Scott Hodge this morning released the latest Tax Foundation Fiscal Fact in response to a new study from the Organisation for Economic Co-Operation and Development (OECD). The OECD study shows that for the 17th consecutive year, the average rate of corporate taxes in non-U.S. countries fell while the U.S. corporate tax rate stayed the same.

As a result of the U.S. failure to lower its corporate tax rate for more than two decades while other major...

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