The Tax Policy Blog

April 16, 2008

Oklahoma Governor Brad Henry has signed into law a 130-page omnibus bill that, among many other things, creates a $10,000 one-time income tax deduction for unreimbursed costs associated with donating all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow (Section 37, pages 89-90). The bill directs the Oklahoma Tax Commission to write rules outlining what would be a deductible...

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April 16, 2008

Let's be straight. When you are going to let the National Association of Home Builders and the National Association of Realtors® tell you what is good tax policy, you might as well throw out everything you ever learned in ECON 101 or basic public finance. They aren't trying to tell you what is good tax policy for the nation. They are trying to tell you what is good tax policy for themselves. And despite what you may hear, policies that are good for housing are not necessarily good for the...

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April 16, 2008

The Tax Foundation, in a friend-of-the-court brief filed with the South Dakota Supreme Court, urges that state to stop its discriminatory insurance tax system that taxes out-of-state companies at twice the rate of in-state companies. The case, Metropolitan Life Ins. Co. v. Kinsman, is currently before the court on a petition for rehearing.

Since explicit discrimination in rates was struck down as violating the Equal Protection...

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April 16, 2008

Some observations on how taxes were discussed in tonight's high profile Democratic debate: 

Best comment of the night on tax policy: Obama refuting Hillary Clinton regarding the payroll tax cap. Clinton used rhetoric that it would hit firefighters and educators. Obama essentially asked how many firefighters and teachers make over $102,000 ($97,500 in 2007)? He also pointed out to Clinton that the Social Security reform done in the 1980s actually raised the retirement age and raised...

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April 15, 2008

From WAPT in Jackson, Mississippi:

The Mississippi House has approved a $1.25 daily hotel tax in Jackson to help the city increase police officers' salaries.[...]

The bill says anyone who has an extended hotel stay of at least 30 days would not be charged the extra $1.25 a day. Many lawmakers stay in Jackson hotels for their regular sessions, which last between 90 and 120 days...

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April 15, 2008

Republican presidential candidate John McCain has released some new suggestions for tax policy, including a temporary "repeal" of the federal gasoline tax from Memorial Day to Labor Day. Other highlights courtesy of the Associated Press included an increase of the personal exemption for dependents from $3,500 to $7,000, as well as an optional flat tax.

If the purpose of the federal gasoline tax is...

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April 15, 2008

The Tax History Project recently added Franklin Delano Roosevelt's tax returns to its collection of presidential tax returns.

Also on the site are returns for George W. Bush, Bill Clinton, George H. W. Bush, Ronald Reagan, Jimmy Carter, and Richard Nixon.  In addition, Richard Cheney, Barack Obama, Hillary Clinton, and John McCain are included.

The first thing we noticed on...

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April 15, 2008

April 15 probably conjures up images of tedium and drudgery for most people (even in the nation's capital), but the history of Tax Day is actually fascinating—at least we here at the Tax Foundation think so. If you're looking for reading material to help you pass the time while waiting in line to mail your tax return (or...

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April 15, 2008

MSN TV has a slideshow on its website detailing how 18 celebrities have had run-ins with the IRS for not paying enough in taxes. Here's their list:

Wesley Snipes
Richard Hatch
Sophia Loren
Leona Helmsley
Marc Anthony
Richard Pryor
Luciano Pavarotti
Martha Stewart
Willie Nelson
Chuck Berry
Nicholas Cage
Don...

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April 14, 2008

Separation of powers is highly valued in the United States, with our federal constitution and the constitutions of all fifty states separating powers in some form between executive, legislative, and judicial branches. So far as I know, only legislative branches have the power to impose taxes, although (for instance) the judicial branch can impose fees to cover its costs.

A case in Louisiana last week affirmed these principles. The case,...

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April 14, 2008

Slate.com columnist Samantha Henig has written an entertaining and informative article regarding common questions one may ask about the tax code. They include the following:

If you check the box (Presidential Campaign Fund box), do your taxes increase?

Once you send in your forms, where does your tax check actually go to?

Americans living and working abroad are often allowed to exclude tens of thousands of...

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April 14, 2008

Following February's Virginia Supreme Court ruling invalidating seven taxes collected by the Northern Virginia Transportation Authority, Governor Tim Kaine has signed a bill setting up a refund process for those who paid the illegal taxes. The refund process will be different for each type of tax:

Grantors Tax on Home...

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April 11, 2008

Earlier this week, two economic policy research organizations that tend to favor a larger role for government, the Economic Policy Institute and the Center on Budget and Policy Priorities, released a joint report detailing how income inequality has grown over the past few decades within individual states. The report is available here. From the report, there are two key issues that need to be addressed further: declining...

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April 11, 2008

On most fiscal policy issues that come up in Washington, there is disagreement among reserach organizations regarding what is good or bad tax policy. But on the recent housing bill that passed the U.S. Senate and gave billions in more tax breaks for housing, the tax policy research community is in unanimous agreement.

Researchers from the following organizations have stated that this bill is bad tax policy: Heritage...

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