The Tax Policy Blog

May 24, 2007

Michigan lawmakers, already busy attempting to replace the revenue from the $2 billion a year Single Business Tax (SBT) scheduled to be repealed at the end of the year, are currently scrambling to plug an alleged $800 million budget deficit.

Their focus is currently on raising the state's individual income tax from 3.9 percent of adjusted gross income to a rate somewhere around 4.5 percent.

From the...

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May 23, 2007

Ever since it was first debated in the legislature, North Carolina's lottery has been plagued by scandal, crime, accusations of underhanded machinations in the legislature, and a slew of other problems. But...

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May 23, 2007

With gas prices again approaching record highs, many lawmakers at the state level are responding with the "do anything" mentality, which typically includes short-run gas tax holidays. The latest comes from the state of Connecticut, courtesy of NBC-30 Hartford.

Republicans in the state...

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May 21, 2007

In a new report, the Tax Foundation has shown that the tax code has worse problems in its regular income tax than in its alternative minimum tax (AMT). Luckily, if we fix those problems in the regular income tax, we'll solve the annoying AMT at the same time.

People on the left and right try to portray the AMT as the bane of the middle class. In fact, people in the middle 20% of American earners ($42K - $64K in 2004) are almost never "in AMT." In...

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May 18, 2007

We published a new study on the Alternative Minimum Tax (AMT) yesterday, titled "Fixing the Alternative Minimum Tax," in which Tax Foundation Chief Economist Patrick Fleenor explains that the problem with the AMT actually lies in the regular income tax code:

Why do commentators routinely refer to our income tax code as Swiss cheese, and not cheddar? Because if American income were cheese, the untaxed portions of our income would be large holes caused by exclusions,...

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May 16, 2007

Tax credits for education as opposed to direct spending such as grants have become popular in recent years because they allow politicians to be called "tax cutters" as opposed to "big spenders" when in reality the two policies are the same. Some Republicans in Wisconsin are continuing that theme. From the Green Bay Press-Gazette:

Three Republican...

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May 16, 2007

The growing trend in recent years has been to raise revenue in ways that are politically feasible, which is why new Census data shows that the fastest growing tax at the state and local level has been tobacco taxes, despite rapidly growing property taxes. Raising taxes on tobacco products is an easy political sell because tobacco tax revenue benefits all taxpayers but only a minority of people must pay any significant amount of the tax.

The following table shows the percent...

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May 15, 2007

New Census data released by state for fiscal year 2005 shows which states saw the biggest increase in property tax collections during the real estate boom from 2000 through 2005. The table below presents the top 10 states in terms of change in property taxes per capita (at all levels of government within a state) from 2000 to 2005. For the full table, click here.

Wyoming and Kansas top the list, followed by Texas which has since...

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May 14, 2007

In the Washington Post's lead story today, Steven Mufson shined a light on rural electric cooperatives and the power plants they operate, and the gas stations they operate, and the Dairy Queens they operate.

Rural electric co-ops pay no corporate income tax, a huge advantage over the taxable power producers they compete with. Do they use that tax advantage to help...

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May 11, 2007

Yesterday Tax Foundation President Scott Hodge testified during a Senate Committee on Finance hearing titled "Can the Middle Class Make Ends Meet? Economic Issues for America's Working Families."

He discussed recent Tax Foundation research on the middle-class tax burden and the changing demographics of the middle class. He explained that, due...

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May 08, 2007

One county offiicial in Nassau County, NY (Long Island) is proposing a county-level cigarette tax to help fill the county government's coffers. From Newsday:

Nassau County Executive Thomas Suozzi is headed to Albany Tuesday to lobby state legislators for his proposals to enact a county cigarette tax and install red-light cameras, even though some lawmakers...

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May 02, 2007

The Wall Street Journal has an interesting article today regarding a paper by Harvard economists N. Gregory Mankiw and Matthew Weinzierl. The two economists look at how imposing a flat income tax with the rate based on the taxpayer's height, since height is highly insensitive to change, could lead to a more efficient economic outcome given a revenue constraint. From the Wall Street Journal:

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May 02, 2007

The Tax Foundation has calculated Tax Freedom Day since the early 1970s, and we thought we had seen every possible criticism of it since. Turns out we were way off.

Professor Thad Williamson of the University of Richmond caught us off guard with his bizarre critique of "freedom." ["No Taxes Would Mean No Prosperity," Richmond Times-Dispatch, April 30, 2007. Also...

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May 01, 2007

Whenever we release a report that ranks states we hear complaints from two groups. One group complains their state is not as bad as we found, and the other group complains their state is much worse than we found.

Our recently released State-Local Tax Burden Report always draws complaints from both groups. Not surprisingly, states at the top of the tax burden ranks complain the most...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.

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