The Tax Policy Blog

March 28, 2008

Tax Watch is the Tax Foundation's quarterly tax policy newsletter, presenting our economic research and analysis in a simple, non-technical format—ideal for the non-economist looking for a clear explanation of current tax issues.

The Spring 2008 issue is now on our website. Highlights of this issue include:...

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March 28, 2008

"IRS: We've got what it takes to take what you've got."
—Author unknown

"Internal Revenue Service: The world's most successful mail order business."
— Bob Goddard

"Did you ever notice that when you put the words 'the' and 'IRS' together, it spells 'THEIRS'?"
—Author Unknown

"The flat tax would be so simple, you could fill it out on a post card. A post card that would say, in effect, having a wonderful time; glad most of my money is here."
—Steve...

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March 28, 2008

"Dear Taxpayer," it starts off. "We are pleased to inform you that the United States Congress passed and President George W. Bush signed into law the Economic Stimulus Act of 2008, which provides for economic stimulus payments to be made to over 130 million American households. Under this new law, you may be entitled to a payment of up to $600 ($1,200 if filing a joint return), plus additional amounts for each qualifying child."

You might have received this junk-mail-esque notice in...

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March 27, 2008

This morning, the Bureau of Economic Analysis (BEA) reported finalized GDP numbers for the fourth quarter of GDP, as well as figures for corporate profits and corporate income taxes paid for calendar year 2007. They show corporate income taxes growing at only a 2.1 percent pace in 2007, which is down by a lot compared to growth in 2006, which was 15.7 percent...

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March 27, 2008

The Politico has posted a transcript of a CNBC interview that Barack Obama did with Maria Bartiromo. In it, he talks about how he feels it is proper tax policy to raise taxes on capital gains, while cutting taxes for targeted groups like seniors and low-income homeowners. Here's an excerpt of the interview:

BARTIROMO: How do you plan to change the tax code when it comes to...

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March 26, 2008

Tax Freedom Day, the day on which Americans have earned enough money to pay all their federal, state and local taxes for the year, will fall on April 23 this year, according to the Tax Foundation's annual calculation using the latest government data on income and taxes.

Tax Freedom Day is calculated by dividing the official government tally of all taxes collected in each year by the official government tally of all income earned in each year. Governments—federal,...

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March 25, 2008

An excellent article appeared yesterday in the Asbury Park Press on the dangers of "economic nexus"—the practice of states imposing taxes on businesses that have no employees or property within the state. An excerpt from "Revenuers get aggressive" by Jason Method:

In 2001, using the same nexus theory, Los Angeles County, Calif., unsuccessfully attempted to force the company...

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March 25, 2008

The Tax Foundation is still looking for summer interns! We've extended our application deadline to April 15, the same day taxes are due (to help keep us mind). Please pass on the information to anyone you think might be interested.

Past and present interns have researched and published commentaries on policy in newspapers and journals, with staff assistance in topic selection, editing, and placement; assisted in microsimulation models of tax changes; and posted on our...

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March 25, 2008

Barack Obama has released his 2006 tax return, largely as a political maneuver to highlight the fact that his opponent, Hillary Clinton, has yet to release her return. Tax returns are always fun to look at for tax geeks like us. In fact, because the federal tax code is involved in so many facets of our lives (housing, what car you drive, children, churches, etc.), one can find out a lot of information...

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March 25, 2008

Republican Senator Johnny Isakson, a former real estate agent, has come forth in support of yet another tax handout for housing. The bill is co-sponsored by many other Republicans in the Senate, including Senators Gregg, Craig, and Senate Minority Leader Mitch McConnell. This time they want to give a $15,000 per year tax credit spread out over three years to anyone who purchases a new home, a...

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March 21, 2008

Musical instrument and sound equipment giant Peavey may rock everywhere from the Sydney Opera House to theme parks and stadiums worldwide, but in Mississippi the company may as well be a chump for continuing its business loyalty to the state. The company was founded in Mississippi and continues to locate 18 of its 33 manufacturing facilities in the state. Peavey...

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March 21, 2008

Lawmakers in the State of Florida are considering putting on the ballot in November a constitutional amendment that would explicitly limit the annual increase in state spending, similar to Colorado's TABOR provision. As expected, liberal groups are crying foul, arguing that such a move would cut government services. Of course it would cut government spending. If it didn't cut government spending, it would be pointless.

Under a truly benevolent government that was seeking to...

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March 21, 2008

Everyone knows that the Easter Bunny delivers Easter baskets to children every year. However, much remains unknown about the mysterious rabbit: his whereabouts the rest of the year, where he purchases his supplies, the source of his funding, etc. Since we focus on taxes here at the Tax Foundation, we decided, despite the lack of reliable data, to delve into the tax angle of this story and speculate on how much the Easter Bunny pays in sales taxes.

We will assume that he...

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March 19, 2008

Regarding yesterday's divided court ruling upholding the North Carolina Education Lottery, news reports indicate that the plaintiffs plan to appeal to the state supreme court. Because there was a dissent on the three-judge panel in the Court of Appeals, the right of appeal is automatic.

More on the Heatherly case ...

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March 19, 2008

Details here:

Under the proposal, the state would reduce the income tax rates by 10 percent over five years beginning July 1, 2008. Under that plan, the maximum 6 percent tax rate would drop the first year to 5.88 percent and so on until it reach 5.4 percent.[...]

Instead of freezing residential [...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official blog 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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