The Tax Policy Blog

June 03, 2008

The U.S. federal corporate income tax is currently 35 percent, second-highest in the world. If it were cut, who would benefit? Lots of people, says Harvard economics professor N. Gregory Mankiw:

The ultimate payers of the corporate tax are those individuals who have some stake in the company on which the tax is levied. If you own corporate...

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June 03, 2008

State-run lotteries present a number of tax policy problems: they lack transparency, they impose a tax paid disproportionately by the poor, they unnecessarily complicate the tax system, and the profits are often not used as promised. As if that were not bad enough, there is also potential for corruption. Many people mistakenly believe that government-run lotteries are free of corruption while privately run lotteries would be rife with scandal...

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June 03, 2008

New Jersey, Maryland and Connecticut lead the list of states that would bear the brunt of the Social Security tax hike that Sen. Obama has suggested.

In a new Tax Foundation Fiscal Fact, economist Gerald Prante ranks the 50 states from least to hardest hit, assuming Sen. Obama's proposal to lift the wage tax ceiling becomes law.

"More than 10 percent of taxpayers in New Jersey would pay higher payroll taxes if the wage tax ceiling were abolished," says Prante. "It...

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June 02, 2008

Wesley Snipes (tax case against him covered here, verdict here) is appealing prosecutors' efforts to collect $258,000 in costs from him. More here at Tax Prof Blog.

As an aside, in China, tax evasion is a crime subject to the...

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June 01, 2008
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May 31, 2008

Next week, the U.S. Senate will debate the Lieberman-Warner bill, which would impose a cap-and-trade type system on U.S. producers that emit carbon. A well-designed cap-and-trade system that properly auctions off the rights to emit carbon is a de facto carbon tax. Supporters of cap-and-trade in the political arena rarely admit this because the word "tax" carries a negative connotation, whereas "regulation to protect the environment" sounds good to voters, even though both policies are...

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May 31, 2008

Florida Governor Charlie Crist, who has actually been mentioned as a possible vice presidential candidate for Republican John McCain, is backing, along with some giant insurance companies, a plan that would have the federal government in effect raise taxes on the rest of America to subsidize insurance for residents of Florida.

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May 30, 2008

When the U.S. Supreme Court ruled last week (Kentucky v. Davis, covered here) that states may tax out-of-state bonds at a higher rate than in-state bonds, because doing so supports a legitimate government objective, not discrimination to benefit private interests.

The Court...

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May 30, 2008

Illinois Governor Rod Blagojevich (D) this week signed H.B. 2482, which extends that state's film tax credit for another year. The credit was first established in 2003, and boosters say it has brought more film production to the state. Some thirty states have similar film tax credits, which (depending on the state) reimburse sales and even income and payroll taxes paid on production and editing costs.

No doubt, since it's corporate welfare...

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May 28, 2008

The Hawaii Constitution requires that the state refund taxes to taxpayers if the general fund is in surplus by at least five percent for two years. Obeying the letter of the law, the state legislature enacted a $1-per-taxpayer income tax credit, which will be paid out on the 2009 tax return.

Local tax policy activist Lowell Kalapa says its stingy:

Last...

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May 28, 2008

UCLA Law Professor Eugene Volokh explains why California's proposed 25% tax on pornography is likely unconstitutional:

Content-based taxes on the sale of First-Amendment-protected materials (and recall that the law targets not just unprotected and illegal obscenity, but also constitutionally protected pornography) are generally forbidden[....]

See his full analysis...

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May 28, 2008

Today's Wall Street Journal has an editorial looking at Michigan's fiscal deterioration following last year's tax hikes:

Officials in Lansing reported this month that the state faces a revenue shortfall between $350 million and $550 million next budget year. This is a major embarrassment for Governor Jennifer Granholm, the second-term Democrat who shut down the...

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May 28, 2008

One of the inquiring public's most frequently asked tax questions is how many people in the entire country file a tax return. A common related question is how many people aren't obliged to pay any income tax when they file a tax return. We take our answers straight from the IRS, and here they are for 2005.

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May 27, 2008

This blog has long documented the pathetic (as measured by truthful substance) campaigns put forth by the National Association of Home Builders and the National Association of Realtors when it comes to federal tax policy. Now they are at work at the state government level. And where else would you expect a state to approve more bad tax policy than Michigan? This morning's Tax Analysts reports that both Republicans and Democrats are seeking to provide relief from the "pop-up tax" as...

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May 27, 2008

A reader wrote in after reading this post on the Kentucky v. Davis outcome, asking for more information about why states' practice of excluding municipal bond interest income is problematic. There are many reasons, of course, one of which is that the exclusion helps shield high-tax states from interstate competition that could bring down tax burdens. Our brief points to previous Tax Foundation research on the topic:

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