The Tax Policy Blog

October 26, 2007

Yesterday, House Ways & Means Chairman Charlie Rangel released his long-awaited "mother of all tax reforms" (which isn't really true tax reform) that would basically raise taxes on the very wealthy to pay for tax cuts for those who are modestly wealthy (AMT class) and small tax cuts for some in the middle and bottom. But Republicans have responded by claiming it amounts to a $1.3 trillion tax hike, since that's the total amount of money raised from only the tax increase provisions in...

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October 26, 2007

7,400+ jurisdictions in America impose sales taxes, each with their own rates and laws on what's taxed and what's exempt. Many exempt groceries, for instance, but not prepared food. This bulletin from the Iowa Department of Revenue "carves" out another distinction based not on what the product is, but on "understanding":

Pumpkins: Pies and jack-o'-lanterns

The...

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October 26, 2007

In a strange political twist, Ways and Means Chairman Charlie Rangel has virtually ignored the "middle class" in the massive new tax plan he has put before the nation. In the context of a presidential campaign with candidates of both parties gushing promises of tax cuts and spending programs for the "middle class," it's almost refreshing to consider a plan that's all about the poor and rich.

Here's a Fiscal Fact that gives a...

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October 25, 2007

The ridiculous bubble-filled bracket structure of the federal corporate income tax may be on the way out (see rate table below). At least we hope so.

Ways and Means Chairman Rangel has proposed lowering the 35% corporate tax rate to 30.5%. While it's haggling over the details, Congress should reduce the table below to one rate or two at the most. At the very least, it should abolish the...

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October 25, 2007

Indiana Governor Mitch Daniels put forth his property tax reform measure Monday in an attempt to alleviate the anger of the masses of Hoosiers who are upset about their rapidly growing property tax bills. Here's a summary from the Indianapolis Star:

His proposal, which requires legislative approval, would provide about $1.billion in new property tax relief...

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October 25, 2007

From the IRS's perspective, Congress needs to do something with the AMT soon because retroactive tax legislation can have very bad consequences for tax administration. We need only look back at the fiasco that ensued last year after Congress passed the Tax Relief and Health Care Act of 2006 in December, after the IRS had already finalized and printed all the tax forms.

We wrote here about the Treasury Inspector General for Tax Administration (...

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October 24, 2007

Attorneys at Mintz Levin have written an article summarizing the arguments made by the Davis side in the upcoming Supreme Court case Kentucky Dep't of Revenue v. Davis, in which the Tax Foundation submitted an amicus curiae ("friend of the court") brief in support of Mr. and Mrs. Davis. The Mintz Levin article is excellent and mostly neutral, though...

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October 23, 2007

The Florida House yesterday passed by an almost unanimous margin a bill that would put a property tax cut on the ballot in January. The Senate has a scaled down version. Details from the Sun-Sentinel:

Facing deadline pressure, the Florida House passed a reworked property tax-cut plan with overwhelming bipartisan support on Monday, setting up a showdown...

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October 22, 2007

Today, an Associated Press article released from the campaign trail in New Hampshire detailed Obama's speech on tax policy to a local restaurant (where no sales tax is charged, by the way).

At a Nashua restaurant, [Obama] renewed his pledge to make the nation's tax system more fair.

"We've got a tax code that's making things worse. This isn't an accident," he...

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October 20, 2007

In what he calls a defense of the Alternative Minimum Tax (AMT), Michael Kinsley in the Washington Post never gets around to telling us what lawmakers should do about it. Instead he contents himself with criticizing Senator Grassley for advocating repeal and President Bush for not having repealed it.

He makes one good observation though: "Tax deductions aren't (...

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October 19, 2007

The blog post just before this one was our 1,000th blog post since we launched the Tax Policy Blog about two and a half years ago. Thanks to all who read it and help make it a success!

One classic blog post of ours from two years ago today discusses the simultaneous birth and death of the ignored recommendations of the President's Tax Reform Panel:

The panel intends to call for the capping of tax deductions on...

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October 18, 2007

President Bush's decision to veto the smoker-funded SCHIP expansion has elicited some silly new counter-arguments from the Center on Budget and Policy Priorities (CBPP), specifically over who's going to pay for it: smokers who are disproportionately poor.

In the past, the tax-raisers at CBPP ("the Center") have balked somewhat at tobacco taxes, knowing they hit the poor hardest.

But in the current, feverish campaign, that sympathy for the poor has been twisted. CBPP has...

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October 17, 2007

Today's Boston Herald features an op-ed by Tax Foundation economist Curtis Dubay. In his piece, Curtis tackles the Bay State's long-enduring "Taxachussetts" label. He points to Massachusetts' low ranking in the 2008 State Business Tax Climate Index as one reason the label has lived on.

In his column, Curtis points out the facts:

...
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October 17, 2007

Today, the Dalai Lama was awarded a congressional gold medal from the United States. But before the House of Representatives approved the $30,000 funding for the award on September 13th, Representative Ron Paul (R-TX), known as Dr. No for his typical opposition to government spending programs that he does not see authorized by the Constitution, had this to say as the lone voice opposing the measure. Enjoy.

Mr. PAUL: Mr. Speaker, with great sadness I must rise to oppose...

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October 17, 2007

What to do about the Alternative Minimum Tax (AMT)? That is the $64,000 question in Washington tax policy circles. The Washington Post has two new stories on the issue. The first is an A.P. story detailing Charlie Rangel's offering of a one-year patch due to the fact that time is running out to do something before filing season begins in January.

Pressure is building for...

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