The Tax Policy Blog

September 29, 2008

One part of the bailout proposal is a limit on the compensation of executives who work for bailed out companies. Participating companies who pay their executives more than $500,000 will face a tax penalty, by being unable to deduct the additional pay as an operating expense.

The provision is certainly understandable, as it seems perverse to heap extra pay on an executive who ran the company into the ground with...

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September 29, 2008

The bailout bill just failed in the House 205-228. (See the roll call here.) Before that vote, I wrote up a study on how the bailout might affect state and local property tax collections, particularly if the government found itself holding title to some of the underlying assets.

Since Congress's...

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September 29, 2008

Although the true economic incidence of the proposed bailout bill is unknown, most would probably agree that those in the New York region stood to gain from this proposal, which is why it strikes me as odd that so many of the members from that region voted against the bill.

Here are the 228 members who voted NO, courtesy of the Clerk. Republicans in italics. By the way, Ron Paul voted no. I knew you'd be...

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September 29, 2008

The McCain campaign continues to criticize Barack Obama for his vote earlier this year on a non-binding budget resolution, accusing Obama of supporting raising taxes on those making as little as $42,000 per year. But what McCain won't tell you is that Obama's tax plan as a candidate isn't going to raise taxes on very many people making $42,000 (none directly through the individual income tax). As...

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September 29, 2008

The amount of misinformation in this campaign from both candidates is bad enough. Now we have an anti-Obama organization called Rightchange.com spreading nonsense about Sen. Obama's tax plan. I saw tonight a brand new ad on cable television that the organization is running which says that Barack Obama wants a 35 percent tax rate for Wall Street but wants small businesses to pay a tax rate of 62 percent. Here is the ad courtesy of NPR:

...

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September 28, 2008
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September 27, 2008

The fluid negotiations over the proposed bailout package include two tax-related components. One would affect preferred stockholders in Fannie Mae and Freddie Mac who sold between January 1 and September 7 (the day both were seized by the federal government), by treating their capital loss as ordinary income and not at the lower long term capital gain rate. Financial institutions were often pressured by...

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September 27, 2008

The Mississippi Tax Study Commission has released its final report, here.

Past Tax Foundation commentary on these Mississippi reforms and proposals:

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September 26, 2008

For all the nonsense that has been spouted regarding the housing market over the past five years, there have been many voices of reason on the issue, one of which includes Dean Baker, of the left-of-center Center for Economic and Policy Research.

Today, he responds to the absurd NY Times suggestion that home prices be stabilized. Here's his full blog post from today:

...

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September 26, 2008

Was funny at the time...

September 26, 2008

Disclaimer: deposit insurance is not my area of expertise.  The above question is not rhetorical; I am actually interested to know if there are reasons to avoid raising the FDIC limit, in light of advantages I can see to doing so.

It looks like the proximate cause of Washington Mutual's failure was a run by depositors.  Given this, should we be looking at raising FDIC insurance limits to increase depositor confidence in...

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September 26, 2008

We've all heard for the longest time from advocates of the massive amount of subsidies that housing receives from government (both through spending and tax policies) that such subsidies are good policy. But when you move beyond the rhetoric of the "American dream" or "ownership society" and get to the core of the issue, you'll find that in order to justify such massive subsidies, one must show a positive externality from housing (as well as a sufficient elasticity for the subsidy)...

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September 26, 2008

Although the first debate was originally supposed to be about foreign policy, due to the current financial situation in the United States, the economy was the issue for the first half hour of the debate. In the economic portion of the debate, both Sens. Obama and McCain made some statements about taxes that played somewhat loose with the facts. Let's take a look at a few of these courtesy of CNN's...

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September 25, 2008

Economists posting on the Cafe Hayek blog have been dissecting the $700 billion bailout proposal, discussing various causes and possible steps to be taken during the current economic situation. Professor Russ Roberts, quoting Nobel Prize winner Vernon Smith, notes that a 1997 tax change had much to do with the run-up in housing prices:

[I]n 1997, the tax on capital gains for housing was...

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