The Tax Policy Blog

January 26, 2007

The Congressional Budget Office released its Budget and Economic Outlook: Fiscal Years 2008 to 2017 yesterday. In the coming days we are sure to hear the familiar refrain that tax cuts caused the budget deficit, which CBO estimates at $172 billion for 2007. As most budget insiders would tell you, though, rapidly increasing government spending is more responsible for the deficit.

Tax cuts on wages such...

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January 25, 2007

We recently posted the 2006 individual income tax rates for each state. Those are the rates that every state taxpayer will be paying when they file their 2006 state tax returns sometime between now and April 15, 2007. This is the single most up-to-date and accurate source for all the states' rates, brackets, standard deductions and personal exemptions.

Surprisingly, no states increased individual income taxes this year, although this was...

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January 25, 2007

We have posted a new Fiscal Fact regarding the President's health care initiative detailing various examples of how certain families would fare under the proposal.

While it is often frustrating that the income tax code continues to be the tool that policymakers seek to advance certain agendas, reforming the tax treatment of health care is sorely needed. This policy proposal has both good and bad components. Unfortunately, because the President...

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January 25, 2007

Lawmakers in Delaware are currently debating a bill (H.B. 12) that would exempt automakers from the state's gross receipts tax.

Legislation to exempt Delaware's two auto manufacturers from the state's gross receipts tax will be introduced when the General Assembly convenes next week, an initial step toward persuading DaimlerChrysler to keep its...

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January 18, 2007

Federal Reserve Chairman Ben Bernanke today issued yet another warning of U.S. fiscal crisis on the horizon if growing entitlement spending is left unreformed. From the Washington Post:

Federal Reserve Chairman Ben S. Bernanke warned today of a "fiscal crisis" in coming years if the government does not act soon to curb federal retirement and health care entitlement...

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January 18, 2007

Another ridiculous proposal in the long line of porn tax proposals (see here, here, here and here).  

It seems a legislator in Tennessee wants to enact a tax on porn to pay for an elimination of the state's tax on groceries.

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January 18, 2007

Probably the most common misunderstanding about taxes is the view that business taxes are paid by companies, rather than individuals. But thanks to an email from one Texas resident, we have yet another illustration of how people clearly bear what economists call the "economic incidence" of taxes, even when companies are legally responsible for remitting tax payments.

On January 1st a new 1 percent tax on business gross receipts went into...

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January 17, 2007

CNSNews.com reports House lawmakers will attempt to add language to the U.S. Tax Code that will "roll back some tax loopholes and subsidies for oil companies.”

"While the oil companies experience record profits, the federal government has been giving them a free ride," Jeff Rickert, vice president of the Apollo Alliance, charged during a news conference...

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January 17, 2007

As part of our continuing effort to illustrate the regional burdens of taxes, we have posted three more datasets relating to federal income taxes. We used IRS zip code-level data to estimate what each county, congressional district, and major city area pay in federal individual income taxes.

As with the AMT, the highest paying area is around New York City. Manhattan tops the list of counties, while New York's 14th congressional district, represented by Carolyn Maloney (D), is number...

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January 16, 2007

If you haven't seen it already, be sure to check out our excellent new podcast interview with Prof. John Mikesell on the economic and administrative drawbacks of gross receipts taxes. You can listen to the full interview here, or read the transcripts here instead.

Although the main topic of the conversation was gross receipts taxes, here's an interesting aside...

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January 15, 2007

As we celebrate our 70th anniversary this year, we look back at Tax Foundation history. We have just posted a 10-page Tax Foundation report published in 1987 titled "The Tax Foundation, 1937-1987: The First Fifty Years."

The report summarizes the Tax Foundation's beginnings in New York and 50 years of contributions to sound tax policy at the federal, state, and local levels. An excerpt:

In 1954 the Magill Committee issued a "Federal Finances" study in conjunction...

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January 10, 2007

This morning, the Senate Finance Committee held a hearing on whether tax credits should be used to offset the harm done to some businesses as a result of the minimum wage increase. Unfortunately, once again members are attempting to use the tax code to solve one problem, yet could likely end up creating more problems.

Because the economic incidence of the minimum wage hits many differing parties, lawmakers' attempts to compensate business owners through tax credits as a result of a...

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January 09, 2007

We've posted a new commentary this morning from fellow economist Gerald Prante with some smart analysis of the current hullabaloo over the alternative minimum tax (AMT). He reminds us of the AMT's history, its often-overlooked virtues, and suggests a sensible long-term solution to its current flaws:

When Congress enacted the AMT in 1969, it was responding to a media tempest about a few high-income people who had legally paid no income...

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January 09, 2007

Today, the Tax Foundation released a Fiscal Fact along with multiple data sets that highlight where the Alternative Minimum Tax (AMT) hits the hardest. The main finding is that the AMT hits hardest in California and in the Northeast, especially the areas surrounding New York City. The following is a list of the top 10 congressional districts that are hit by AMT.

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January 09, 2007

It's becoming increasingly obvious that the Europeans could teach us Americans a thing or two about business tax policy.

On December 23rd, the European Commission approved a pilot project that would allow for formulary tax apportionment for certain businesses that conduct multilateral operations in the EU. The real innovation, however, is that businesses participating in the project would be able to calculate their profits using their...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official weblog 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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