The Tax Policy Blog

December 31, 2008

During times of economic hardship, is it better to put money toward necessities and savings or to risk some in the hopes of winning more, e.g. playing the lottery?

Lottery agencies have recently been hoping customers would choose the latter, and it seemed at first that they would get their wish. In a 1994 study, Prof. John L. Mikesell of Indiana University found that...

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December 30, 2008

William McGurn, a former Newscorp executive and former speechwriter for President George W. Bush, penned his "Main Street" column in the Wall Street Journal this morning, urging President-Elect Obama to make a specific New Year's resolution: "I will not allow America to become New Jersey."

Providing his thoughts on the consequences...

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December 30, 2008

Last night, Senior Economist Gerald Prante appeared on CNN's Lou Dobbs Tonight to discuss President-Elect Obama's plans to first repeal the Bush tax cuts on the top two income brackets, then deciding to let them expire in 2011, then apparently changing his mind again through his adviser David Axelrod.

...

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December 30, 2008

Last week on his blog, Greg Mankiw made the most important point of this entire question of fiscal stimulus policy: GDP is not a perfect proxy for economic well-being.

Usually, GDP is a reasonable proxy for economic well-being, so more is better, but that is not true in this example. Part of the problem here is that GDP includes government purchases at cost. If the...

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December 30, 2008

Rep. Richard Neal of the Ways and Means Committee (a winner of the Tax Foundation's Distinguished Service Award) wants to expand the tax exemption for private-activity municipal bond interest, making it exempt from the AMT. This income source is already exempt from regular tax rates, although Tax Foundation economists have argued that it should not be.

Neal's justification is that it would be...

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December 29, 2008

The New York Daily News provides a link to a Youtube video made by New York State Health Commissioner Richard Daines who makes a five-minute video arguing for a tax on non-diet soda.

You can tell that Daines and those in Albany who designed this stupid policy have very little understanding of Pigouvian taxation in the first place because he is promoting an ad valorem tax on...

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December 29, 2008

With tax collections down, Mississippi legislators have proposed a hiring freeze in their first draft of a $5 billion budget proposal for 2010. In November, Gov. Haley Barbour (R) imposed $42 million in cuts to balance the current budget. Barbour supports a cigarette tax...

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December 29, 2008

Minnesota's $37 billion 2010-11 biennial budget is expected to have a $4.85 billion shortfall, with revenues falling and spending slightly up from the current budget. Gov. Tim Pawlenty (R) and many legislators agree that tax increases are unlikely and unable to fix the entire shortfall. Lawmakers have...

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December 29, 2008

Yesterday, Tax Foundation Tax Counsel and Director of State Projects Joseph Henchman went on C-SPAN's Washington Journal to talk about budget shortfalls that are hitting most states, discussing what different tax/spending plans governors and state legislators are proposing. 

Click here to see the video.

Stay updated through the Tax Foundation's Tax Policy Blog...

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December 29, 2008

Lawmakers have approved $134 million in cuts recommended by Gov. Jennifer Granholm (D), including closing one prison. The shortfall now stands at somewhere around $106 million (as estimated by Granholm) to $266 million (legislative estimate), out of the state's $9.7 billion budget. Granholm opposes new taxes, having...

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December 29, 2008

Gov. Deval Patrick (D) in early December ordered cuts to close a $1.4 billion shortfall in the current budget. The cuts included several programs and $624 million in "9C" cuts whereby the governor can reduce spending without legislative approval. The current budget is $1.3 billion larger than the previous budget. For future years, Patrick has indicated...

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December 29, 2008

In early 2008, Maryland raised just about every state tax to raise $976 million to fund additional spending and close a "structural" budget shortfall (the current budget is $827 million larger than the previous budget, or a 4.16% spending increase). Officials now estimate a $415 million shortfall this year...

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December 29, 2008

In a play off of the "Western Canon of literature [that] has been all but emasculated in recent decades by left-wing PC forces that rule academia," Peter Pappas, a CPA and Tax Attorney in Orlando, features the Tax Foundation's website among ten sites in "The Online Tax Canon" on his Tax Lawyer's Blog, describing it as "a must...

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December 29, 2008

To balance the current $6.26 billion 2008-09 biennial budget, Gov. John Baldacci (D) has proposed $140 million in budget cuts including $27 million in education, correctional officers...

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December 29, 2008

Louisiana Gov. Bobby Jindal (R) expects the $1.3 billion shortfall in current $30 billion budget will worsen. He has urged efficiencies such as $25 million from a hiring freeze and other cuts, and is also studying program elimination. Jindal has ...

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