The Tax Policy Blog

January 17, 2008

CongressDaily reported this morning that Democrats in Congress are seeking to help prop up the housing market as a way of helping a weakening economy. From CongressDaily AM:

Top Democrats are weighing the need for a rescue package for the nation's battered housing industry, exploring the possibility of allowing state housing authorities greater ability to go into distressed areas to finance the purchase of foreclosed homes and creating a temporary government agency that...

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January 17, 2008

We have posted a new Tax Foundation Podcast interview with Dr. William Gentry. a professor of economics at Williams College in Massachusetts. Dr. Gentry recently wrote a paper for the Treasury Department titled A Review of the...

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January 17, 2008

Vermont is one of a dozen states that are considering leasing or selling their lotteries. Yesterday, Alicia Hansen, author of the Tax Foundation Background Paper Gambling with Tax Policy: States' Growing Reliance on Lottery Tax Revenue, testified before the Vermont Legislature's Ways and Means Committee on the merits and drawbacks of different types of lottery privatization.

She explained that selling the lottery to a private...

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January 16, 2008

The tax fraud trial of Wesley Snipes began this week in Florida, and the actor faces up to 16 years in prison for his failure to file tax returns between 1999 and 2004, or pay tax on the estimated $38 million he earned in that period.

Snipes faces an uphill battle, as few succeed in convincing juries of a genuine, good-faith belief that he or she had no obligation to pay income taxes. Snipes has...

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January 15, 2008

We've written before on Virginia's "abusive driver fees" and "civil remedial fees," and why they are just a tax on traffic offenses. Because the revenue goes to general state spending, they are properly called a "tax" and not "fees." We've covered how this is an example of politicians targeting easy revenue sources for punitive taxes, the public outcry over the huge assessments, and finally, the...

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January 15, 2008

With California running out of borrowing options to cover huge budget deficits stretching back nearly a decade, Governor Arnold Schwarzenegger got everyone's attention with proposed budget cuts last week:

Schwarzenegger's proposed budget-cutting mechanisms include:

  • A 10 percent decrease in education funding, including $4.4 billion in cuts from K-12 education and $1.13...
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January 15, 2008

If anybody ever wonders why tax reform is so difficult to accomplish, one need look no further than the website of the National Association of Realtors®, which is featuring on the front page a podcast where its president, Dick Gaylord, talks about how "politics is our business." You would think real estate is their business, but then again, the NAR's primary mission...

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January 14, 2008

Maryland Governor Martin O'Malley and legislative leaders are opposing the repeal of the 6 percent computer services tax which will take effect July 1. We've previously written about the tax, covering how it was added at the last minute in a back room, the problem of singling out for tax one industry that could very easily leave the state, and how confusing...

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January 14, 2008

Sales tax holidays are not good tax policies for various reasons. They create distortions in consumption over time, huge compliance cost issues for businesses which can disproportionately affect small businesses, and they often create uncertainty regarding which items are exempt and when. In reality, they are just political gimicks where politicians try to buy people's votes with a small tax cut so that they can say "we cut taxes."

But one legislator in Nebraska is taking...

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January 14, 2008

Over the weekend, Tax Foundation President Scott Hodge sat down with National Public Radio's Tess Vigeland to discuss the impact of taxes on the fabled American "middle class." The piece was part of a special edition of NPR's Marketplace program dedicated to discussing what exactly the middle class is and where these individuals and families stand today.

From the...

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January 14, 2008

The Office of the National Taxpayer Advocate has released its 2007 report to Congress, outlining several recommendations, including:

  • Create a process to update Congress on the impact of last-minute tax changes (referring in part to the late-year AMT patch, which has delayed the production of AMT deduction forms until February)
  • Enact a taxpayer "bill of rights" outlining rights and obligations of U.S...
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January 12, 2008
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January 11, 2008

Investor's Business Daily cartoonist Michael Ramirez draws a pretty funny picture, contrasting the presidential campaign's "change" rhetoric with the feelings of many U.S. taxpayers. Enjoy!

Change

credit: IBD/Michael Ramirez 

January 11, 2008

Carroll County Circuit Judge Thomas Stansfield yesterday dismissed a lawsuit challenging Maryland's recent tax increases.  The suit alleged that during the special session called to enact the tax increases, the Senate violated a constitutional requirement to obtain consent of the House before adjourning for more than three days.  The case turned on what the state constitution means by "consent...

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January 11, 2008

The Tax Foundation is often asked which states exempt certain items from their general sales taxes, especially as they relate to food. The following is a list of the states that do tax groceries, and if applicable, which ones apply a special rate on grocery items. All other states do not tax groceries.

States that tax groceries (rate if not fully taxed): Alabama, Arkansas (3%), Hawaii, Idaho, Illinois (1%), Kansas, Mississippi, Missouri (1.225%), Oklahoma, South Dakota,...

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