The Tax Policy Blog

March 31, 2009

The local government in Fairfax County, Virginia, has been caught red-handed by TV reporters in the performance of a classic "Washington Monument" stunt. That's the name given to a public relations strategy employed by government officials to avoid budget cuts.

Here's how it works: when revenues are falling, and some taxpayer advocates call for a spending reduction that local officials want to avoid, they announce that the most vital, sympathetic program on their books will...

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March 31, 2009

Tax Freedom Day will arrive on April 13 this year, according to the Tax Foundation's annual calculation using the latest government data on income and taxes.  This is the earliest in the year that Tax Freedom Day has fallen since 1967.

This is eight days earlier than in 2008, and a full two weeks earlier than in 2007, for two reasons: (1) the recession has reduced tax collections even faster than it has reduced income, and (2) the stimulus package includes large temporary tax cuts...

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March 31, 2009

David Paterson, reversing his previous position in favor of balancing New York State's budget without an income tax hike, has agreed with Democratic legislative leaders on a plan that raises about $7 billion in new taxes and fees.  A majority of that new revenue will...

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March 30, 2009

The federal cigarette tax goes from 39 cents to $1.0066 per 20-cigarette pack tomorrow. The increase, as we noted in February, was coupled with an expansion of the federal children's health care program.

As my colleague Gerald Prante and I argued, a politically popular and expensive program should never be funded by a small, low-income, politically unpopular minority like cigarette smokers. Just because the...

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March 27, 2009

D.C. Mayor Adrien Fenty (D) made a promise in his campaign not to raise taxes. So it might be surprising to learn what he's doing to balance the city's $5.3 billion budget for 2010:

The mayor's budget would...

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March 27, 2009

James Taranto at the Wall Street Journal comments on the AIG bonus tax:

So, you still work for AIG, having decided not to desert a sinking ship. For this you received a retention bonus, but the politicians have decided to make a scapegoat out of you. Last week the House passed a bill that would tax your bonus at 90%--which, since you live in high-tax...

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March 27, 2009

Attempts to improve public health (and raise government revenue) by taxing soft drinks have been in vogue of late, most notably including New York Governor David Paterson's abortive attempt to impose an 18% ad valorem tax on sugary drinks.  But do soft drink taxes really affect public health?  Via the National Center for Policy Analysis, I ran across an August 2008...

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March 27, 2009

Consumerist has a story today about Jane, who bought shoes online from Nine West, and then discovered that she was charged $5.48 more than she expected on a $220 order.  Nine West explains that the change was an adjustment to sales tax:

When placing your online order, on your checkout page you will see that we indicate the...

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March 27, 2009

On March 19, 2009, the U.S. House of Representatives voted 328 to 93 to pass H.R. 1586, which imposes a 90% income tax on bonuses earned by employees who work at a company that received an aggregate of $5 billion in federal TARP bailout funds, including specifically Fannie Mae and Freddie Mac. If enacted, the additional tax would be retroactive to January 1, 2009, but any employee who waives or returns the bonus before the end of 2009 would have the surtax waived.

Critics of the bill...

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March 26, 2009

Even within the northeast, Rhode Island stands out as a high-tax state.  The Ocean State ranks 46th out of 50 states (and worst in New England) on the Tax Foundation's 2009 State Business Tax Climate Index, which rates state tax codes on their friendliness to business.  Neighboring Connecticut is 37th; Massachusetts, defying the "Taxachusetts" moniker, is second-best in New England at 32nd.

With a simple glance at tax rates, it'...

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March 26, 2009

Reports are coming out today that the IRS has plans to offer partial amnesty to individuals involved in tax evasion via offshore accounts. The plan, formulated in response to increased pressure to reduce the tax gap, is to significantly reduce the penalty for failing to file a Report of Foreign Bank and Financial Account...

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March 26, 2009

Last night, Tax Foundation Communications Director William Ahern appeared on Dateline: Washington, a nationally syndicated news magazine from Radio America hosted by Greg Corombos. Corombos and Ahern discussed President Obama's proposal to limit charitable contribution tax deductions for the top two income brackets, the status of the "...

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March 26, 2009

Senator Ben Cardin (D-MD) has introduced a bill that would allow newspapers to file as 501(c)(3) nonprofits in order to avoid paying corporate income taxes. Many newspapers around the country (NY Times,...

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March 26, 2009

Roger Runningen and Ryan Donmoyer of Bloomberg reported yesterday:

"President Barack Obama is putting former Federal Reserve Chairman Paul Volcker in charge of a tax-code review aimed at closing loopholes, streamlining the law and generating revenue, budget Director Peter Orszag said.

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March 25, 2009

From the March 17, 2009 edition of the Wall Street Journal:

"If the government suddenly said you would incur more onerous and expensive tax regulations and reporting requirements if you moved your business to a low-tax state such as Texas or Florida from a high-tax state such as New York or California, you would be justifiably outraged. Now substitute Switzerland and...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.

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