The Tax Policy Blog

October 11, 2007

Ever since President Bush's veto of a bill that would have increased SCHIP funding at the expense of a cigarette tax hike, the supporters of the bill have predictably come forth with the "You don't care about the children" line.  Continuing that logic, I guess the citizens of Seattle, home to a city that voted over two-thirds for John Kerry in the 2004 election, don't care...

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October 11, 2007

Yesterday we unveiled the eagerly awaited Tax Foundation State Business Tax Climate Index for fiscal year 2008.  The Index ranks how "business-friendly" the 50 state tax systems are, providing a roadmap for state lawmakers concerned with keeping their states tax-competitive.

The Index ranks states based on the taxes that matter most to businesses and business investment: corporate tax, individual income tax, sales tax, unemployment tax and property...

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October 10, 2007

Last night's Republican Presidential Debate focused mainly on economic issues, and "low taxes" was a theme of most of the candidates. Here are some of the good points made and not-so-good or incorrect statements made. You can view the entire debate transcript via the WSJ here.

The good:

McCain on tax reform: "Should we reform our tax code, which is completely broken, which no one...

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October 10, 2007

The Tax Foundation has released a Fiscal Fact showing the projected parameters of important tax variables for Tax Year 2008, using the most recent release of the Consumer Price Index. The IRS will base its inflation adjustments for Tax Year 2008 on the price inflation of the CPI-U variable from September 2006 - August 2007. So the tax return you file in April 2009 will actually depend upon the price index from September 2006.

The story for this...

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October 09, 2007

Some 7,400 jurisdictions in the United States impose a sales tax, and most if not all of those taxes carve out exemptions and exceptions for politically-favored products. Keeping track of what's taxed and what's not in 7,400+ tax codes is a tough job, and if you mess up, you face fines and lawsuits.

For instance, the following items are among those exempt from Pennsylvania's sales tax: wrapping paper, toothbrushes, coal, coffins, horses (but only if shipped out-of-state or...

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October 09, 2007

Hotel taxes are often viewed as taxes on out-of-towners—a way of raising more money for government services without having to pay for them. Many cities dedicate some or all of the money for new sports stadiums, convention centers, or tourism-promoting activities, and oversight is lax because the taxes aren't paid by voting constituents.

Coronado, California is one such city, but Councilman Frank...

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October 09, 2007

In just a few hours, the GOP Presidential hopefuls will participate in a debate in Dearborn, MI. The theme of the day is taxes and the economy. Accordingly, the Tax Foundation has offered some suggested questions that should be asked of the candidates:

  • Sen. Clinton recently unveiled a plan to use the tax code to reward those who have children, and Sen. Obama offers a proposal to use the code to reward those who own...
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October 05, 2007

Per the release of income tax data by AGI percentile yesterday by the IRS, the Tax Foundation has updated its popular "Summary of Federal Individual Income Taxes" page. The data recently released is for tax year 2005 (same as calendar year).

The report highlights the fact that both the tax share and AGI share of the top 1 percent reached all-time highs in 2005. In 2005, the top 1 percent of tax returns earned 21.2 percent of adjusted gross income...

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October 05, 2007

In what could be a short term stay-of-execution, the Cook County Commissioners were deadlocked this week, eight votes for and eight against a two percentage point increase in the county-wide sales tax rate.

Read previous blogs on the Cook...

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October 03, 2007

Last week, Hillary Clinton suggested that giving a $5,000 bond to each child upon birth would be a policy that she would support. Others have suggested this in the past. Here's the NY Daily News summary of the Republican response:

Sen. Hillary Clinton's plan to give every newborn a $5,000 bond, money meant to defray college costs when the kids hit...

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October 03, 2007

In a rare use of the veto pen by the Bush administration that has already sent labels of "heartless" his way from Senate Majority Leader Harry Reid, sound tax policy has been preserved. Regardless of whether or not SCHIP, the State Children's Health Insurance Program, should be expanded, choosing one group of Americans to fund it -- smokers -- is terrible tax policy and has no business in a free society.

If members of Congress want...

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October 02, 2007

Today, Congressman David Obey (D-WI), Chairman of the House Appropriations Committee and a vocal critic of the current war in Iraq, has put forth a proposal to impose a war tax on the American people. From Fox News:

A top Democratic congressman, saying Democrats "have had it with being maneuvered and jerked around" on the war in Iraq, offered another approach Tuesday to change the course of funding for the...

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October 01, 2007

The Washington Post's Amy Gardner did a terrific job digging up evidence of high-income people living in public housing in the Washington area. The article focused on Fairfax County, Virginia, the capital area's most populous county and one where the average income is quite high in national comparisons.

She quite properly gave the director of the county program a chance to...

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October 01, 2007

In what could be the final nail in the coffin for the Michigan economy, lawmakers passed a tax hike of $1.35 billion by expanding the sales tax to some services and increasing the income tax from 3.9 percent to 4.35 percent. See articles...

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September 28, 2007

George Washington University Professor David Brunori had this to say to those in Georgia contemplating elimination of property taxes in the state: local governments will be essentially powerless. From the Atlanta Journal-Constitution:

He would replace the lost revenue (only $8 billion) with state...

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