The Tax Policy Blog

August 02, 2007

A new report from the non-profit Commonwealth Institute for Fiscal Analysis predicts a huge budget deficit for Virginia and demands higher taxes.

Quoting from the Washington Post account:

"The budget relies heavily on sales taxes, which are volatile during economic downturns."

Both of those claims are false. As a quick...

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August 02, 2007

North Carolina is likely to continue its Ohio-like climb up our tax burden rankings due to the two-year budget just signed by Governor Mike Easley.

As part of the budget, North Carolina's sales tax increased 0.25 percentage points to total 4.25 percent before local add-ons,...

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August 01, 2007

Since the early 1970s, frustrated education activists (including many local school officials) have turned to the courts in an effort to secure more education spending. In at least 27 states, these plaintiffs have secured court orders requiring lawmakers to appropriate more state money for schools. Our new report, Appropriation by Litigation: Estimating the Cost of Judicial Mandates for State and Local Education Spending, chronicles...

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August 01, 2007

A new Tax Foundation Fiscal Fact released Monday analyzes the growing role of the federal government in local education spending. In particular, we highlight the fact that in 1999-2000, the average federal revenue per student sent to local school districts was $578. Five years later, following passage of No Child Left Behind, that number had grown to $919, amounting to a 39 percent increase when adjusted for inflation. Kansas schools...

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July 31, 2007

Democratic presidential hopeful John Edwards recently released a plan to increase the capital gains tax rate to 28 percent. The current capital gains rate is 15 percent, so Edwards' plan would nearly double the current rate.

The preferential treatment of capital gains and dividends—both taxed at...

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July 30, 2007

It would be one of the most significant changes in state public finance ever: the elimination of property taxes in the Hoosier State. Here was the scene in Muncie last Thursday:

Fed up with skyrocketing property tax bills, hundreds of people marched to Delaware County's government building Thursday to call for the tax's elimination.

The protest came a day after Gov....

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July 27, 2007

The AMT debate has produced some rather amusing political moments that would make one think Washington was in Bizarro World. A press release from Representative Richard Neal's office, released Wednesday, shows that the congressman is upset over the fact that the AMT is "taking back" some of the Bush tax cuts from those in certain income groups. Yes, those are the same tax cuts that Representative Neal voted against in...

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July 27, 2007

During yesterday's Treasury conference on Business Taxation and Global Competitiveness, Oracle Corp. President and Chief Financial Officer Safra Catz made the insightful comment that many Americans see "taxing corporations as a victimless crime" because they view corporations as abstractions and fail to understand that the economic burden of corporate taxes is actually borne by people—customers, workers, or shareholders—not the company...

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July 27, 2007

Yesterday, Democratic Presidential Candidate John Edwards laid out his economic plan should he become President in 2009, including his tax agenda. Edwards argued that special interests need to be taken out of the tax process, which is true. And then he said the middle class is shouldering the federal tax burden, which is totally untrue. From Yahoo News:

...

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July 27, 2007

We have posted a new Fiscal Fact to the website and an accompanying data page regarding the issue of who itemizes on their federal tax returns. In general, upper-income taxpayers are the most frequent itemizers. In addition, the states with the highest incomes tend to have the largest fraction of taxpayers itemize. Other factors that influence itemization rates across the country include regional housing...

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July 26, 2007

Most parents worry about the quality of the local public schools and try to ensure that their children receive the best education possible. But some people have taken the quest for improved public education a step further: to the courthouse. Over the past 30 years, lawsuits have come to be seen as a way to remedy alleged inadequacies in public education financing.

Courts in 27 states have found their states' education spending to be constitutionally "inequitable" or "...

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July 26, 2007

Throughout the entire debate on the alternative minimum tax, politicians have taken aim at the fact that most millionaires don't pay AMT, as if this is some sort of injustice. Such rhetoric, however, is merely a function of the politicians' own misunderstanding of the tax system, or they may be intentionally trying to deceive the public by not giving them the full picture.

The reason millionaires don't pay AMT is because their...

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July 26, 2007

One of the problems that plague democracies is the divide between society's interest over the long run and what is good for politicians in the short run.  The latest example of this may be on display in Ohio where the state is considering exchanging the remaining funds it is due under the 1998 tobacco settlement for a lump-sum payment.  If implemented, it would be the largest financial transaction in the state's history.

The three-member Buckeye Tobacco Settlement Financing Authority...

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July 25, 2007

Yesterday, we released a study showing that the United States has the second highest corporate tax rate among the 30 OECD countries. It also highlighted that in the past 12 years, the US is one of only two countries in that group that has not slashed its corporate income tax rate. Five countries cut their rates last year, and eight more will have done so by 2008. Tax cuts are on the march,...

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July 25, 2007

The public outcry over Virginia's new policy of extremely high driver's fees is unfortunately a sign of hypocrisy within the general public with regards to government taxing bad behavior to fund a general government function. When cigarette taxes are proposed to fund general government programs as they have been recently at the federal level and as was passed in Virginia three years ago, there is/was little outcry. Yet the...

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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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