The Tax Policy Blog

July 16, 2008

Our recent report on local income and wage taxes notes that all 23 Maryland counties impose an income tax on residents, but does not break them out. Based on a few requests, we do so here.

A side note: Nonresidents are not subject to the county income tax, but must pay to the state an amount equivalent to the lowest county tax rate (currently 1.25% - Maryland residents should thank Worcester County for keeping this low!).

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July 16, 2008

According to a recent Bloomberg article, Speaker Pelosi has suggested another round of economic stimulus (no details reported). The first round of stimulus checks, according to some, was gobbled up by rising energy prices. In addition to rebates, another stimulus package may include additional...

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July 16, 2008

The Michigan Economic Growth Authority (MEGA) doles out tax credits and grants ostensibly to encourage out-of-state businesses to expand and relocate in Michigan. However, MEGA's seven-person board seems to believe virtually any relocation is worthy of a grant and a tax credit.

As one example,...

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July 15, 2008

We'd like to thank legislatures in Florida and Virginia for promoting sound tax policy by doing nothing at all.

  • In June, Virginia Governor Tim Kaine (D) called a special legislative session that was intended to raise $1.1 billion in new taxes for transportation. Richmond policymakers had lots of different ideas about how to do that, most of them...
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July 15, 2008

State Tax Review (subscription required) reports that the California Franchise Tax Board has issued rules for income tax filing by same-sex married couples.  As in other...

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July 15, 2008

California has the dubious distinction of being the only state with a double-digit individual income tax rate. A new Tax Foundation Fiscal Fact examines the state's changing tax rates over the years in light of the current debate in the legislature on whether to increase the top rate again. From Fiscal Fact No. 134, "California Legislators Push for More Double-Digit Income Tax Rates," by William Ahern:

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July 15, 2008

The Cato Institute hosted a policy forum today entitled McCain and Obama: Comparing Their Economic Platforms.  One of the three speakers, Dan Mitchell, summed the future of the American tax burden up quite nicely:

            No matter who wins, it's going to grow.

Mitchell also offered a fair comparison of the two distinct tax proposals.  Obama's plan, according to Mitchell, means "higher taxes on work...

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July 15, 2008

Happy Tax Freedom Day to our freedom-loving friends in Israel. According to the non-profit Jerusalem Institute for Market Studies, July 15th marks the day in which Israeli citizens have finally worked to pay off all of their tax bills and can now begin to work to pay their own bills. Click here for the details.

In case you are trying to do the math, Israelis...

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July 14, 2008

Beginning July 1, 2008, workers in Philadelphia will see a little bit more in their paychecks. That day marks the second reduction within a year in that city's wage tax imposed on both residential and nonresidential workers in Philadelphia, although it remains the highest in the nation.

The new rates are 3.98% for residents (down from 4.219% in early 2008 and 4.26% in 2007) and (precise to the ten-thousandth digit) 3.5392% for nonresidents (down from 3.7242% in early 2008...

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July 14, 2008

One of last week's FreedomFest 2008 events was a debate between proponents of the FairTax and the Flat Tax. Both are tax reform proposals that would replace much of our existing federal tax system. The FairTax is a national sales tax imposed on retail transactions, coupled with a "prebate" sent to each American each month. There are many Flat Tax proposals, but all aim to eliminate many of the deductions and credits in the tax code, and tax all income at one rate.

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July 14, 2008

Tax Watch is the Tax Foundation's quarterly tax policy newsletter, presenting our economic research and analysis in a simple, non-technical format-ideal for the non-economist looking for a clear explanation of current tax issues.

Highlights from the Summer 2008 issue include:

  • Sizing Up Obama's Social Security Tax Plan
  • Senate Testimony: Time to Clean Up the Tax Code
  • U.S. States Lead World in High Corporate Taxes
  • High Gas...
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July 14, 2008

In a Background Paper published last year, we considered the long-term effects of judicial mandates requiring state legislatures to "fix" allegedly inadequate education systems.

Far from being a panacea, these mandates have largely failed to sustain recurring spending for classroom resources, teachers' salaries, etc. At the same time, good-intentioned "dabbling" in education policy has left some courts with years of clogged...

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July 14, 2008

An article in today's Washington Times highlighted the fiscal recklessness of the tax plans of Senators Obama and McCain. It also featured a quote on Obama's tax plan from Tax Foundation president Scott Hodge and a counter quote from Tax Policy Center Director Len Burman:

Mr. Hodge, citing Congressional Budget Office data, said that the top 1...

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July 11, 2008

State Tax Notes (subscription required) reports that Kansas Governor Kathleen Sebelius regrets that the state missed out on $87 million in uncollected corporate income tax by staying in compliance with federal tax law. She believes Kansas's legislature should have voted to "decouple" from the recent federal stimulus package that permits companies "bonus depreciation"—that is,...

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July 11, 2008

Like children squabbling over a toy, state policymakers attempt to take tax dollars from residents of other states.  Tax Foundation Tax Counsel Joe Henchman's BATSA brief sheds some light on the situation:

State officials [...] have every incentive to pursue beggar-thy-neighbor tax policies designed to shift tax burdens from voting in-state residents to out-of-state residents and businesses unable to resort...

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