The Tax Policy Blog

October 17, 2007

Today's Boston Herald features an op-ed by Tax Foundation economist Curtis Dubay. In his piece, Curtis tackles the Bay State's long-enduring "Taxachussetts" label. He points to Massachusetts' low ranking in the 2008 State Business Tax Climate Index as one reason the label has lived on.

In his column, Curtis points out the facts:

...
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October 17, 2007

Today, the Dalai Lama was awarded a congressional gold medal from the United States. But before the House of Representatives approved the $30,000 funding for the award on September 13th, Representative Ron Paul (R-TX), known as Dr. No for his typical opposition to government spending programs that he does not see authorized by the Constitution, had this to say as the lone voice opposing the measure. Enjoy.

Mr. PAUL: Mr. Speaker, with great sadness I must rise to oppose...

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October 17, 2007

What to do about the Alternative Minimum Tax (AMT)? That is the $64,000 question in Washington tax policy circles. The Washington Post has two new stories on the issue. The first is an A.P. story detailing Charlie Rangel's offering of a one-year patch due to the fact that time is running out to do something before filing season begins in January.

Pressure is building for...

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October 17, 2007

The Tax Foundation has released a new comprehensive study that looks at the gasoline tax at both the federal and state level, both today and in a historical context. Here's an excerpt from the executive summary:

Over the past century, Americans have witnessed a marked increase in mobility through safe and reliable roadways. This improved mobility has undoubtedly increased the overall quality of life in the United States. Gasoline...

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October 16, 2007

13,000 Americans will be randomly selected for an IRS audit for research purposes, according to U.S. News & World Report:

The Internal Revenue Service relaunched its program of random audits this month in an effort to hone its ability to estimate compliance rates and crack down on...

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October 16, 2007

If Maryland lawmakers approve tax increases during the special session that begins October 29, then Maryland's taxpayers might lay some of the blame at the feet of the state's courts.  In fact, it is unlikely that Maryland would need to raise taxes in special session if it weren't for court ruling a decage ago.

Back in 1996, a state court ruled (in the case of...

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October 15, 2007

How much federal spending comes back to each state, compared to the federal taxes paid by residents of each state? That's the question answered each year by the Tax Foundation and the Census Bureau. Census provides the spending breakdown, and the Tax Foundation tallies the taxes and calculates the ratios.

Census published the spending data for federal fiscal year 2005 earlier this week in its Consolidated Federal Funds Report (CFFR).

See the Tax Foundation's news...

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October 15, 2007

In a recent Associated Press (AP) article comparing federal taxes to federal spending by state, author Stephen Ohlemacher reports District of Columbia residents paid $31,250 per capita in federal taxes.

See an earlier blog post debunking Ohlemacher's amateurish methods.

Ohlemacher calculated this greatly inflated amount for District of Columbia residents because...

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October 12, 2007

In what may be one of the strangest sets of tax proposals put forth to fill a budget gap ever in public finance, Chicago Mayor Richard Daley has decided that he wants to raise property taxes in the city, as well as raise taxes and fees on selected products, including bottled water.

From the Chicago Tribune:

Mayor Richard Daley reached for bottled water to slake his...

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October 11, 2007

Ever since President Bush's veto of a bill that would have increased SCHIP funding at the expense of a cigarette tax hike, the supporters of the bill have predictably come forth with the "You don't care about the children" line.  Continuing that logic, I guess the citizens of Seattle, home to a city that voted over two-thirds for John Kerry in the 2004 election, don't care...

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October 11, 2007

Yesterday we unveiled the eagerly awaited Tax Foundation State Business Tax Climate Index for fiscal year 2008.  The Index ranks how "business-friendly" the 50 state tax systems are, providing a roadmap for state lawmakers concerned with keeping their states tax-competitive.

The Index ranks states based on the taxes that matter most to businesses and business investment: corporate tax, individual income tax, sales tax, unemployment tax and property...

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October 10, 2007

Last night's Republican Presidential Debate focused mainly on economic issues, and "low taxes" was a theme of most of the candidates. Here are some of the good points made and not-so-good or incorrect statements made. You can view the entire debate transcript via the WSJ here.

The good:

McCain on tax reform: "Should we reform our tax code, which is completely broken, which no one...

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October 10, 2007

The Tax Foundation has released a Fiscal Fact showing the projected parameters of important tax variables for Tax Year 2008, using the most recent release of the Consumer Price Index. The IRS will base its inflation adjustments for Tax Year 2008 on the price inflation of the CPI-U variable from September 2006 - August 2007. So the tax return you file in April 2009 will actually depend upon the price index from September 2006.

The story for this...

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October 09, 2007

In just a few hours, the GOP Presidential hopefuls will participate in a debate in Dearborn, MI. The theme of the day is taxes and the economy. Accordingly, the Tax Foundation has offered some suggested questions that should be asked of the candidates:

  • Sen. Clinton recently unveiled a plan to use the tax code to reward those who have children, and Sen. Obama offers a proposal to use the code to reward those who own...
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October 09, 2007

Some 7,400 jurisdictions in the United States impose a sales tax, and most if not all of those taxes carve out exemptions and exceptions for politically-favored products. Keeping track of what's taxed and what's not in 7,400+ tax codes is a tough job, and if you mess up, you face fines and lawsuits.

For instance, the following items are among those exempt from Pennsylvania's sales tax: wrapping paper, toothbrushes, coal, coffins, horses (but only if shipped out-of-state or...

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