The Tax Policy Blog

November 26, 2007

In April, residents of Doña Ana County, New Mexico (home of Las Cruces) voted 50.7%-49.3% to approve a 1/4-cent sales tax increase to part fund construction of a $198 million space vehicle launchpad. (Additionally, one-quarter of the tax revenue goes to "spaceport-related education in local schools.")...

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November 21, 2007

We all love to complain about taxes (and for good reason), but in the spirit of Thanksgiving, we would like to suggest a different way of thinking about taxes—just for one day, that is.  

We'll defer to two writers who said it better than we could:

♦ "A person doesn't know how much he has to be thankful for until he has to pay taxes on it."
              — Author Unknown

♦ "The only thing that hurts more than paying an income...

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November 20, 2007

There are many stories of bad fiscal policy proposals that we often read about and comment here. But there are some stories that just write themselves. From the Associated Press:

Birmingham Mayor Larry Langford is getting lots of questions from the Birmingham City Council about his proposed tax hikes and revitalization plans.

His proposals include doubling the business license fees and a one percent increase in the...

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November 19, 2007

The State of Maryland is already one of the hardest hit states by the alternative minimum tax due to its high-income profile and high taxes on income and property. But now that a tax hike bill has been approved by the legislature and will likely be signed by Gov. O'Malley, the AMT is set to hit Marylanders even harder.

Raising the state income tax from 4.75 percent to three new rates of 5, 5.25, and 5.5 for higher income residents will increase...

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November 19, 2007

Kansas City, Missouri and Kansas City, Kansas are separated by a river, and a good number of people cross that river daily to live in one state and work in the other. Many end up filing tax returns in both states, and to minimize economic distortions, both states allowed the other's residents to take the same property tax deduction when itemizing.

Earlier this year, Missouri repealed the deduction for nonresident taxpayers, seeking to grab a few million dollars even if it...

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November 17, 2007

Today, President Bush used his weekly radio address to call on Congress to pass an AMT patch immediately so as to limit any possible problems for the 2008 tax filing season. Here's text from the President's address:

To deal with this problem, Congress has in recent years passed temporary legislation that prevented most middle-class taxpayers from having to pay the AMT. But this year, Congress has yet to pass this legislation. A failure to do so would mean that 25 million...

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November 16, 2007

The new case that NY tax authorities are bringing against Yankee star Derek Jeter may sound like another case of the "jock tax," but it's quite different.

New York tax authorities already collect state income tax on Derek Jeter's Yankee salary as part of the so-called jock tax, officially called the athletes and entertainers tax or just the non-resident income tax. Like other employees of sports franchises, it doesn't matter where Jeter...

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November 16, 2007

According to the Associated Press, a bipartisan reform commission has recommended junking a series of special-interest sales tax exemptions:

McKay's plan is aimed at repealing exclusions for services ranging from landscaping to lawyering as well as commodity exemptions for such things as ostrich feed and skybox leases at professional sports stadiums.

The committee plans...

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November 15, 2007

Tonight's Democratic debate in Las Vegas will undoubtedly bring up the issue of the war in Iraq, but tax policy issues, especially what to do about the Bush tax cuts, have come up in previous debates as well. Here are some questions on fiscal policy that we would like to see asked of the candidates.

(1) Most of you favor making the tax system more progressive and your first instinct to accomplishing this is to raise marginal tax rates. And most of you, especially Senator Obama, have...

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November 14, 2007

In recent years there has been much talk of increasing cigarette taxes to raise revenue, to stop people from smoking, and to fund health-care spending. These proposals have ignited debates over "sin taxes," tax-induced crime, the use of narrowly targeted taxes, and the appropriateness of...

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November 14, 2007

In the new BusinessWeek, Ways and Means Committee Chairman Charles Rangel seems to greatly expand the "third rail" of American politics.

That famous metaphor has always referred to Social Security: any politician who dared propose cutting Social Security benefits or taxes would be said to have stepped on the third rail, electrocuting his career.

Chairman Rangel told Maria Bartiromo that there are...

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November 14, 2007

The Chicago City Council passed Mayor Daley's budget yesterday, which included a five-cent tax per unit of bottled water sold in the city, in addition to a fairly large property tax hike. From the Chicago Tribune:

Brushing off a rare show of opposition, Mayor Richard Daley won easy City Council approval Tuesday of a spending and tax plan that will tap into the...

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November 13, 2007

Kentucky Senator Jim Bunning (R), who is also a member of the Senate Finance Committee, has called for a repeal of the alternative minimum tax (AMT), arguing that it hurts too many "ordinary Americans." From the Lexington Herald-Leader:

U.S. Sen. Jim Bunning said Tuesday he has introduced legislation to repeal a tax originally targeted at the wealthy but that now affects millions of middle-income people.

...

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November 13, 2007

Rates on Wages, Corporate Income and General Sales to Rise at Once, with Tobacco, Cars and Hotels Thrown in for Good Measure

The Preakness may be in danger, but Maryland has a new type of triple crown. We can't find any record of any state government's having raised every one of its major taxes at the same time. Maryland is about to do just that, and its legislators haven't sugar-coated the tax pill (or bill) they're sending their constituents.

Every...

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