The Tax Policy Blog

August 11, 2008

When I wrote about Barack Obama's windfall profits tax proposal last week, I described it as "a tax on oil sold over the arbitrary price of $80 per barrel."  Like the Carter-era WPT, such a tax isn't really a tax on profits at all—it's a gross tax on production, better categorized as an excise tax.  However, since then, both the ...

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August 08, 2008

As any faithful reader of the Tax Foundation blog knows, our current tax system leaves much to be desired. The loopholes, the hidden taxes, the high rates, and the complexity are just some of its serious problems. However, our tax system has seen some improvements in the last 60 years, as a recent article by Professor J. Giertz of the University of Illinois,...

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August 08, 2008

A new ad that is out from John McCain attacks Barack Obama for wanting to "raise taxes on the middle class," "raise taxes on seniors," and "raise taxes on small business." While I won't digress into the obvious question of why these three groups of people are any more important than others when it comes to tax policy, it's worth asking the question of how true this ad's claim is.

Like most political ads, the statements are technically true. Obama would raise some taxes on some...

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August 08, 2008

Chicago city officials shouldn't express surprise that Chicago's new bottled water tax has brought in just $2 million since going into effect on January 1 through the end of May, far off track for the $10.8 million they hoped it would raise this year. Daley claims that tax revenues would pick up as the weather warmed have turned out not to be the case, as consumers buy their bulk water purchases out-of-town. One retailing...

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August 07, 2008

At the stroke of midnight on January 1, Allegheny County, Pennsylvania slapped a 10 percent tax on poured drinks, on top of all other taxes. Like many other heavy taxes on arbitrary items, the tax is more about generating revenue from a popular-to-target item rather than internalizing an externality:

This proposal makes little sense in terms of sound tax policy. First, why should alcohol and car rentals be targeted as...

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August 07, 2008

John McCain has been taking shots at Barack Obama's tax plan (the one that raises taxes on the investment income and labor income of high-income households), arguing that such a plan would cost American jobs (typical political rhetoric), which he says we cannot afford to do in the current economic situation. Yesterday, McCain said this: "Raising taxes in a bad economy is about the worst thing you...

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August 07, 2008

Everyone knows that federal taxes take a huge bite out of our paychecks, but we can't overlook the role of state and local taxes. The size of the state and local tax burden varies by state, of course, and changes over time within each state.

In a new Tax Foundation Special Report,  "State-Local Tax Burdens Dip As Income Growth Outpaces Tax Growth," senior economist Gerald Prante computes each state's combined state-local tax burden, accounting for taxes paid out of...

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August 06, 2008

Property taxes often are the targets of anger and frustration, especially when the taxing government allows collections to jump year after year, instead of adjusting rates and assessments to maintain stability.

In Florida, Governor Charlie Crist has announced his support for Amendment 5 on the November ballot calling for...

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August 06, 2008

Today's Washington Post joins the Wall Street Journal in editorializing against the discredited idea of windfall profits taxes:

Mr. Obama's proposal to take some of this money from Big Oil and distribute it,...

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August 06, 2008

John McCain has a long voting record, and it is filled with many votes that he probably regrets. Speaking of which, there are his votes against the Bush tax cuts in 2001 and 2003, which he now favors extending (and more). There's his support for non-tax issues (such as the war, McCain-Feingold, and others.) But there have been those moments in John McCain's voting record that sound fiscal policy can speak proud of, such as these laws that ultimately were signed into law by Pres....

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August 06, 2008

When it comes to the tax provisions of the recently enacted housing bill that Pres. Bush signed, there was virtual unanimity among policy organizations in Washington, on both the left and the right, that they were pretty bad. Then again, this is Washington where special interests try to spread half-truths on policies merely to suit themselves. Kim Rueben at the Tax Policy Center blog provides a nice answer to the...

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August 05, 2008

Yesterday, the Wall Street Journal's editorial page took another much-deserved thwack at Barack Obama's execrable "windfall profits tax" proposal. (Unfortunately, between this idea and John McCain's gas tax holiday plan, we know that stupid energy tax gimmicks are de rigueur for today's presidential candidates.) The WSJ correctly notes that oil companies'...

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August 05, 2008

The seemingly constant budget struggle in California took an interesting turn last week when the Governor ordered the termination of 10,000 state employees, while lowering another 200,000 workers' wages to $6.55/hour. Since then, the State Controller refuses to comply with the Governor's orders. California's desperate financial situation has prompted desperate proposals, including higher taxes.

A ...

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August 04, 2008

John Nordloh ("Government should look to Internet for tax solutions," Chicago Tribune, July 7) suggests raising revenues for the City of Chicago and the State of Illinois by taxing out-of-state businesses. He claims the new policy is only fair, as it will put all "transactions on the same 'tax' playing field." Unfortunately, Nordloh misses the point.

Taxation is not...

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August 01, 2008

Thanks to all who came yesterday evening to the Tax Foundation's Chicago Reception at the annual conference of the American Legislative Exchange Council! We had a packed room of state lawmakers, members of think tanks, economists, and others to listen to remarks by Tax Foundation President Scott Hodge and Dr. Richard Vedder of Ohio University.

And congratulations to Rep. Phyllis M. Heineman of South Dakota (in last picture with Dr. Vedder) who won the drawing for an iPod...

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