The Tax Policy Blog

December 18, 2007

If there were a future's market on whether an AMT patch is going to be passed by this weekend (before Congress recesses for the year), the odds would most likely still be yes, but the stock would be falling. The latest from the Washington Examiner:

The congressional struggle over how to protect millions of middle-class people from getting soaked by the alternative minimum tax this year...

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December 17, 2007

It turns out that Illinois Governor Rod Blagojevich, the man who vehemently argued earlier this year that corporations are avoiding paying their fair share in taxes to the State of Illinois, may be avoiding paying his fair share -- to the IRS. An AP article cites how Blagojevich has used large sums of state-funded travel since taking the governorship in 2003, some of which could be considered part of adjusted gross income according to federal tax law. Here's the story from...

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December 17, 2007

We've already written extensively on Maryland's recent tax hikes:  income, sales, and cigarette tax rates will go up next month.  Governor O'Malley's original plan would have also extend the state sales tax to "luxury" services, including real estate management, landscaping, tanning, massage therapy, auto repairs, and health club memberships. 

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December 14, 2007
  • USASpending.org—the federal government's new searchable database providing information about all federal grant and contract spending above $25,000—is launched. This year's Coburn-Obama Act required the creation of the database.
  • House of Representatives votes 226-193 to pass a one-year revenue-neutral AMT patch, which would increase...
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December 14, 2007

Yesterday, the French government announced that it would actively engage in Pigouvian taxation/subsidization in order to promote a better environment. From The Times Online:

France set itself on collision course with Brussels yesterday as it announced green taxes on gas-guzzling cars and a state-funded discount for vehicles that emit small quantities of carbon dioxide.

...

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December 13, 2007

In what is quite possibly the most blatant attempt to use government power to take from one group to give to another, teachers unions in Nevada are proposing to tax casinos to give themselves a pay raise and to pay for some other government services. From the Las Vegas Sun:

Two ballot initiatives to raise taxes on Nevada's biggest casinos by about 20 percent and...

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December 13, 2007

We have written about Warren Buffett's misconceptions on taxes here, here, and here, and, once again, we need to inject some truth and perspective into his recent public statements on the income tax. Buffett made a joint appearance with Hillary Clinton earlier this week and argued for increased progressivity in the tax code....

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December 12, 2007

Retailers in 45 states have the responsibility to collect sales taxes on most purchases made to consumers. In Connecticut, for instance, a consumer buying a new car must pay sales tax on the purchase price to the dealer, who then forwards the money to the state.

If a consumer returns the purchased item to the store, they are refunded the full cost, including the sales tax they paid. The retailer can then claim a refund of the sales tax money forwarded to the state, because...

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December 11, 2007

The Senate's energy bill (H.R. 6, The Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007 ) hits the major domestic oil companies with a $13.5 billion tax hike over ten years by denying them the domestic manufacturing credit—known as the section 199—which is otherwise available to all domestic manufacturers.

The ostensible purpose of this exceptionally bad piece of tax policy is to punish the "evil"...

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December 10, 2007

One of the ten principles of sound tax policy is neutrality—the fundamental purpose of taxes is to raise necessary revenue for programs, not micromanaging a complex market economy with subsidies and penalties. Unfortunately, our tax code is crammed with provisions designed to encourage politically-favored activities, discourage politically-disfavored activities (and occasionally to encourage and discourage the same activity...

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December 10, 2007

Should adult entertainment establishments be charged an extra fee by the government for adults to enter places like topless bars? Governor Perry and many Texas legislators think such discriminatory "taxation" is good public policy. From the Dallas Morning News:

Lawyers for Texas' adult entertainment industry are...

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December 07, 2007

Our tax code is enormously complex. The federal code and regulations alone are over 9 million words; War and Peace, by contrast, is a mere 560,000. Add on state and local codes and regulations, and it's a lot of pages.

One example of the verbosity required by our complex tax system is New Mexico's recent re-definition of "cigarette." Cigarettes...

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December 06, 2007

The AMT debate has a strange effect on normally sensible, smart people.

Senate Finance Committee Chairman Max Baucus (D-MT) just likened the AMT to Frankenstein, saying that "unless we act it will destroy the entire tax system."

This he says about a tax law whose most drastic provision is to take away the state-local tax deduction, a provision that by that way does almost nothing for people in...

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December 06, 2007

News from Thursday night on Capitol Hill regarding AMT, courtesy of Bloomberg:

The Senate agreed to spare 23 million American households from the alternative minimum tax this year after Republicans forced Democrats to drop plans to balance the cuts with higher taxes on managers of hedge funds and buyout firms.

The Senate voted 88-5 to approve a one-year, stop-gap...

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December 06, 2007

Tax Foundation economist Gerald Prante discussed the alternative minimum tax on Wednesday on CNBC along with Phil Kerpen of Americans for Prosperity. Below is the video courtesy of AFP's page on YouTube.

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