The Tax Policy Blog

April 30, 2008

In testimony before the governor's tax commission in Jackson, Mississippi, experts from the Pew Charitable Trust and the Tax Foundation agreed that taxes on phone companies are a terrible burden on the companies and their customers.

Every new service the hyper-competitive phone companies offer spawns a new tax that is grafted onto old taxes left over from when Ma Bell was our one monopoly phone company.

Just today we received a...

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April 29, 2008

In suburban Chicago, some enterprising retailers are encouraging taxpayers to spend their stimulus payment checks in their shops:

About 75 merchants in Geneva's downtown area along and off State Street are looking for you to visit them today and Sunday.

If you do, they'll pick up the sales tax on your purchases.[...]

"Everybody is...

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April 29, 2008

In May, the U.S. Supreme Court will decide whether to hear the case of Centerior Energy Corp. v. Mikulski, an appeal from a lower court decision opening the door to fragmented state-by-state interpretations of the U.S. tax code. The Tax Foundation has filed a friend of the court brief urging the Court to take the case, which raises the question of whether taxes paid to the government can be recovered from a business instead of from the IRS.

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April 29, 2008

For the second time this month, a major British firm announced that it will reincorporate in Ireland to lower its tax bill. United Business Media (UBM) joined the pharmaceutical company Shire in the exodus of UK firms seeking relief from the country's 28 percent corporate tax rate—which is low compared to the 39.4 percent overall rate in the U.S., but is high by E.U. standards. Ireland's corporate tax rate is currently the lowest in Europe at 12.5 percent.

The common trait...

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April 28, 2008

Presidential candidate Barack Obama is using the high price of gasoline to try to get voters to support a windfall profits tax on oil companies based on the price of oil. The issue has not been explored too heavily in the economics literature, but here's some thoughts:

A windfall profits tax on oil companies would not lower the price at the pump.

A windfall profits tax initially would be borne by shareholders of the companies, whose net worth would fall. The...

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April 28, 2008

This presidential campaign season has produced a lot of discussion over the various candidates' supposed knowledge of economics. The sad result is that none of them — Clinton, Obama, or McCain — seems to have a grasp of basic economics. Or perhaps they really do know what they're talking about and are just pandering to those who may benefit from certain policies or those who have a limited understanding of how markets work.

Clinton and McCain are supporting a temporary repeal of the...

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April 28, 2008

The first stimulus checks were mailed today. When your economic stimulus check arrives depends on whether your 2007 tax return set up a direct deposit payment, and on the last two digits of your Social Security number, according to an IRS announcement updated today:

...

Direct Deposit Payments

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April 28, 2008

Co-sponsored by the Tax Foundation and three other nonprofits, a conference on domestic policy issues will be held on Tuesday morning, April 29, from 8:30 to 12:30 at the Sewall-Belmont House & Museum (next to Hart Senate Bldg) at 144 Constitution Ave, NE.

American University, the New America Foundation, and the Committee for a Responsible Federal Budget are co-sponsoring the event with the Tax Foundation. The forum includes top advisers to the...

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April 28, 2008

As Senators Obama and McCain spar over whether a temporary gas tax suspension is a "solution" or a "scheme," the Bloomington Pantagraph has an editorial pointing out the often-ignored problems with temporary tax suspensions:

Members of the Illinois Senate seemed to be thinking more...

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April 28, 2008

Tax Foundation Chief Economist Patrick Fleenor has written an op-ed in the Boston Globe on cigarette taxes and smuggling:

Massachusetts is awash in bootleg cigarettes.

High state cigarette taxes have turned packs of cigarettes into pots of gold for criminals, spawning a massive black market supplied by...

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April 27, 2008

Our new Tax Freedom Day® video has received over 15,000 views on YouTube, one of the most viewed this week, and has received some attention in the blogosphere:

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April 26, 2008

Back when cigarette tax increases were justified by politicians on the grounds of paternalism (even though they really just wanted more money), critics argued that the same argument could be applied to other unhealthy activities and products like candy bars or soft drinks. But such criticisms were dismissed as being scare tactics and unrealistic. But now the nannies at groups like the totalitarian Center for the Science in the Public Interest are having their voices heard in the...

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April 25, 2008

In addition paying $5 million in back taxes, Wesley Snipes has been sentenced to three years in jail for failing to file tax returns as required by law. In his plea for leniency, Snipes asserted that the tax protestor cheats who convinced him that he had no obligation to pay taxes were "wolves and jackals," but to no avail.

We dissected the "§ 861 Argument" that Snipes fell for...

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April 25, 2008

As part of the budget signed by Governor Paterson this month, New York has adopted the "Amazon tax"-a requirement that any out-of-state online retailer collect sales tax on purchases if the business does at least $10,000 worth of business with in-state affiliates. New York officials estimate the tax will bring in...

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April 25, 2008

Today is Arbor Day. And to celebrate, we look back at the Tax Policy Blog archives at a post two years ago on one of the wackiest tax laws in the United States: Hawaii's Exceptional Tree Deduction.

From former TF economist Curtis Dubay:

To mark this occasion we bring to you an amusing personal income tax deduction from Hawaii. The ‘exceptional tree’ deduction is as follows, from the Hawaii Personal Income Tax Instructions:

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