The Tax Policy Blog

December 13, 2007

In what is quite possibly the most blatant attempt to use government power to take from one group to give to another, teachers unions in Nevada are proposing to tax casinos to give themselves a pay raise and to pay for some other government services. From the Las Vegas Sun:

Two ballot initiatives to raise taxes on Nevada's biggest casinos by about 20 percent and...

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December 13, 2007

We have written about Warren Buffett's misconceptions on taxes here, here, and here, and, once again, we need to inject some truth and perspective into his recent public statements on the income tax. Buffett made a joint appearance with Hillary Clinton earlier this week and argued for increased progressivity in the tax code....

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December 12, 2007

Retailers in 45 states have the responsibility to collect sales taxes on most purchases made to consumers. In Connecticut, for instance, a consumer buying a new car must pay sales tax on the purchase price to the dealer, who then forwards the money to the state.

If a consumer returns the purchased item to the store, they are refunded the full cost, including the sales tax they paid. The retailer can then claim a refund of the sales tax money forwarded to the state, because...

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December 11, 2007

The Senate's energy bill (H.R. 6, The Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007 ) hits the major domestic oil companies with a $13.5 billion tax hike over ten years by denying them the domestic manufacturing credit—known as the section 199—which is otherwise available to all domestic manufacturers.

The ostensible purpose of this exceptionally bad piece of tax policy is to punish the "evil"...

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December 10, 2007

One of the ten principles of sound tax policy is neutrality—the fundamental purpose of taxes is to raise necessary revenue for programs, not micromanaging a complex market economy with subsidies and penalties. Unfortunately, our tax code is crammed with provisions designed to encourage politically-favored activities, discourage politically-disfavored activities (and occasionally to encourage and discourage the same activity...

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December 10, 2007

Should adult entertainment establishments be charged an extra fee by the government for adults to enter places like topless bars? Governor Perry and many Texas legislators think such discriminatory "taxation" is good public policy. From the Dallas Morning News:

Lawyers for Texas' adult entertainment industry are...

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December 07, 2007

Our tax code is enormously complex. The federal code and regulations alone are over 9 million words; War and Peace, by contrast, is a mere 560,000. Add on state and local codes and regulations, and it's a lot of pages.

One example of the verbosity required by our complex tax system is New Mexico's recent re-definition of "cigarette." Cigarettes...

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December 06, 2007

The AMT debate has a strange effect on normally sensible, smart people.

Senate Finance Committee Chairman Max Baucus (D-MT) just likened the AMT to Frankenstein, saying that "unless we act it will destroy the entire tax system."

This he says about a tax law whose most drastic provision is to take away the state-local tax deduction, a provision that by that way does almost nothing for people in...

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December 06, 2007

News from Thursday night on Capitol Hill regarding AMT, courtesy of Bloomberg:

The Senate agreed to spare 23 million American households from the alternative minimum tax this year after Republicans forced Democrats to drop plans to balance the cuts with higher taxes on managers of hedge funds and buyout firms.

The Senate voted 88-5 to approve a one-year, stop-gap...

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December 06, 2007

Tax Foundation economist Gerald Prante discussed the alternative minimum tax on Wednesday on CNBC along with Phil Kerpen of Americans for Prosperity. Below is the video courtesy of AFP's page on YouTube.

December 05, 2007

As the mortgage "crisis" continues to garner attention from policymakers seeking to do something to help out homeowners including possible use of the tax code, here's an interesting fact to remember for those complaining about federal policies towards housing courtesy of CBO:

Effective Tax Rate on Capital Income = 13.8 percent

Effective Tax Rate on Capital Income Derived from Owner-Occupied Housing =...

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December 04, 2007

This morning, the Supreme Court announced a unanimous 9-0 decision in CSX Transportation, Inc. v. Georgia State Board of Equalization, ruling in favor of a railroad seeking to challenge Georgia's property tax assessment methods, a change which resulted in a 47 percent increase in its property tax bill over the previous year. The Tax Foundation filed a brief with the...

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December 04, 2007

The alternative minimum tax (AMT) was first put into law in 1970 in response to a Treasury report that said 155 high-income individuals (income over $200,000) paid no income tax at all in 1967. The first year it was implemented was tax year 1970 and was technically called the "minimum tax." The alternative minimum tax wasn't officially instituted until tax year 1979. For a complete history of the AMT and the minimum tax, click here.

The...

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December 04, 2007

Tax Foundation economist Gerald Prante, author of several reports and commentaries on the Alternative Minimum Tax (AMT) debate, discussed the issue on C-SPAN's Washington Journal this morning. Prante is the author of the Tax Foundation's revenue-neutral proposal to greatly diminish the parallel tax system known as the AMT. He has calculated how many taxpayers had to file an AMT return for tax year 2005, in each ...

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December 03, 2007

Back in October, we reported on Mary Bach, a Pennsylvania woman who sued K-Mart because her $3.99 toilet paper purchase was incorrectly taxed (for 28 cents). The Associated Press reports that Ms. Bach won her lawsuit, and under Pennsylvania's consumer protection law, K-Mart must pay $100 (357 times Ms. Bach's actual...

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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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