The Tax Policy Blog

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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January 09, 2007

As we go about updating each state's individual income tax, corporate tax, sales tax, and excise tax rates on our website each January, invariably we come across an amusing anecdote from at least one state's tax system. Last year it was Hawaii's exceptional tree deduction.

While there may be more to come in the near future, California...

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January 08, 2007

The new House Ways & Means chairman, Charlie Rangel (D-NY), suggested simplification of the tax code could be on the committee’s agenda.  During his appearance on ABC’s “This Week”, Rangel offered this exchange:

GEORGE STEPHANOPOULOS (ABC NEWS):  Congressman Rangel, your committee is of course in charge of taxes. And this year 2007, about 23 million Americans are slated to get a tax increase through these...

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January 08, 2007

The Congressional Budget Office recently released Historical Effective Tax Rates: 1979 to 2004. Many are sure to chime in with the usual rhetoric about the top income earners receiving a greater share of the 2001 and 2003 tax cuts and the tax code...

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January 04, 2007

Contrary to the conventional wisdom that workers today are overworked and short on leisure, the average hours worked per person has been falling in many OECD countries since the mid-1950s. However, changes in work habits have varied widely across countries. While workers in the U.S., Canada and Australia worked almost the same number of hours today as they did in the 1950s (a ratio of hours worked in 2004 to 1956 of 1.01, 1.08 and 0.97, respectively), in countries like Germany,...

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January 04, 2007

Sean Kanousis has a useful article today for law.com in which he summarizes the major state tax law events of 2006. 

Reading Kanousis' article is a reminder of how much happened in state tax law in 2006:

-Michigan repealed its single business tax

-Texas instituted its new...

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January 04, 2007

An editorial in today’s Florida Times-Union is a perfect example of the problems caused by the mucking up of the tax code with politically driven tax credits. 

If two families live in different states but have similar size and financial situations, their federal tax bills should be the same.

Right?

Prior to 1986, according to Tallahassee-based Florida...

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January 03, 2007

January 1 not only marks the first day of a new year, it is also often the date new state tax laws take effect.

This January 1 Texas had the largest change to its tax system as the Margins Tax, Texas' version of a gross receipts tax, went into effect.

The Margins Tax was implemented to replace the Franchise Tax to increase revenue for increased education spending as mandated by the Texas Supreme Court.

Property taxes will decrease as a result of the Margins...

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January 03, 2007

When state governments decide to tax something, it usually represents an official stamp of legal legitimacy. But not in the case of Tennessee's illegal drug tax. Despite continuing questions of the constitutional legitimacy of the "crack tax"—officially a "controlled substance tax" since it also applies to bootlegged moonshine—the Tennessee tax continued sluicing revenues into state coffers in 2006....

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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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