The Tax Policy Blog

March 25, 2008

An excellent article appeared yesterday in the Asbury Park Press on the dangers of "economic nexus"—the practice of states imposing taxes on businesses that have no employees or property within the state. An excerpt from "Revenuers get aggressive" by Jason Method:

In 2001, using the same nexus theory, Los Angeles County, Calif., unsuccessfully attempted to force the company...

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March 25, 2008

The Tax Foundation is still looking for summer interns! We've extended our application deadline to April 15, the same day taxes are due (to help keep us mind). Please pass on the information to anyone you think might be interested.

Past and present interns have researched and published commentaries on policy in newspapers and journals, with staff assistance in topic selection, editing, and placement; assisted in microsimulation models of tax changes; and posted on our...

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March 21, 2008

Musical instrument and sound equipment giant Peavey may rock everywhere from the Sydney Opera House to theme parks and stadiums worldwide, but in Mississippi the company may as well be a chump for continuing its business loyalty to the state. The company was founded in Mississippi and continues to locate 18 of its 33 manufacturing facilities in the state. Peavey...

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March 21, 2008

Lawmakers in the State of Florida are considering putting on the ballot in November a constitutional amendment that would explicitly limit the annual increase in state spending, similar to Colorado's TABOR provision. As expected, liberal groups are crying foul, arguing that such a move would cut government services. Of course it would cut government spending. If it didn't cut government spending, it would be pointless.

Under a truly benevolent government that was seeking to...

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March 21, 2008

Everyone knows that the Easter Bunny delivers Easter baskets to children every year. However, much remains unknown about the mysterious rabbit: his whereabouts the rest of the year, where he purchases his supplies, the source of his funding, etc. Since we focus on taxes here at the Tax Foundation, we decided, despite the lack of reliable data, to delve into the tax angle of this story and speculate on how much the Easter Bunny pays in sales taxes.

We will assume that he...

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March 19, 2008

Regarding yesterday's divided court ruling upholding the North Carolina Education Lottery, news reports indicate that the plaintiffs plan to appeal to the state supreme court. Because there was a dissent on the three-judge panel in the Court of Appeals, the right of appeal is automatic.

More on the Heatherly case ...

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March 19, 2008

Details here:

Under the proposal, the state would reduce the income tax rates by 10 percent over five years beginning July 1, 2008. Under that plan, the maximum 6 percent tax rate would drop the first year to 5.88 percent and so on until it reach 5.4 percent.[...]

Instead of freezing residential [...

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March 19, 2008

News stories from across the state of Georgia on Wednesday highlighted the current debate in the state on tax policy: should the state cut the car tax, cut income taxes, or cut neither?

The first question that needs to be asked is whether or not a specific tax on cars is justified in the first place, either for externality reasons or some benefit principle justification? Otherwise, it is just an arbitrary tax on a selected product, making it poor tax policy. Therefore, to...

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March 18, 2008

A new Tax Foundation Fiscal Fact shows that nearly half of U.S. states tax job providers at a higher rate than any other country in the developed world. Counting the federal rate alone, the U.S. has the world's highest corporate tax rate, but including average sub-national rates (federal plus state in the U.S.), Japan edges out the U.S. for the highest-tax location.

This study breaks the tax down by state, adding each state's corporate tax rate to the federal...

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March 18, 2008

The North Carolina Court of Appeals ruled 2 to 1 today that the state lottery is constitutional, because it neither pledges the credit of the state nor imposes a tax. The Tax Foundation had submitted an amicus brief supporting the constitutional challenge to the law brought by the North Carolina Institute for Constitutional Law....

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March 18, 2008

It appears as if the antiwar left and the the supporters of the FairTax have something they agree on: both want to shut down the IRS. Today's Washington Post reports that antiwar protestors plan to march all over Washington, including the offices of the Internal Revenue Service, to mark the 5th anniversary of the beginning of the conflict in Iraq.

Assuming their...

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March 18, 2008

When your stimulus check arrives depends on whether your 2007 tax return set up a direct deposit payment, and on the last two digits of your Social Security number, according to yesterday's IRS announcement:

Direct Deposit Payments

If the last two digits of your Social...

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March 18, 2008

A new study from three prominent economists finds that employees suffer most when their corporate employers must pay high corporate taxes. That contradicts the theory that has prevailed for decades -- that corporate taxes mainly hurt investors -- but it supports a recent CBO study by Randolph that found workers bearing 70 percent of the burden of corporate income taxes.

The new study's authors are Fritz Foley and Mihir...

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March 17, 2008

Maryland's recent tax increases, including the new tax on computer services, is the last straw for some:

Lawmakers' efforts to impose a new sales tax on the computer services industry may have permanently tarnished Maryland's reputation among some small-business owners there, raising the possibility that they will simply pack up and relocate across the border.[...]

"We're thinking about moving...

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March 17, 2008

Kentucky State Treasurer Todd Hollenbach visited the Tax Foundation's office last week to discuss tax reform in Kentucky and his ideas for promoting financial literacy throughout his state. He has enlisted the assistance of the Tax Foundation in providing research and data on tax policy proposals that might be used to education Kentucky's citizens. We will continue to keep in touch with the Treasurer's office and to offer assistance as his financial and tax literacy project gets...

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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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