The Tax Policy Blog

April 28, 2015

A week from today, voters in Michigan will go to the polls to vote on Proposal 1, a constitutional amendment and “tie-barred” legislative tax package that would raise an additional $2 billion a year for transportation, education, and income supports. I wrote about the ballot initiative a...

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April 28, 2015

The National Football League (NFL) will give up its status as a tax-exempt organization, reports Richard Rubin at Bloomberg. Rubin calls it a "move with minimal financial effect and significant symbolic value." NFL Commissioner Roger Goodell said that the tax-exempt status was becoming a "distraction."

This is an accurate understanding of the issue. Over...

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April 28, 2015

Some Democrats in the House of Representatives are today unveiling legislation that would repeal Obamacare's "Cadillac Tax." 

Many have expressed an interest in repealing the tax, but the reasoning given by Rep. Joe Courtney (D-CT) is worth examination: “the excise tax is an unnecessary change that would adversely impact beneficiaries in high-cost areas,” his office said in...

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April 27, 2015

North Dakota is at it again! 2015 will be yet another year in which the state sees lower rates. Last Thursday, Governor Jack Dalrymple signed legislation (SB 2349) that will reduce both individual and corporate rates retroactive to January 1, 2015. Individual income tax rates are reduced by approximately 10 percent across-the-board, while corporate income taxes are reduced by approximately 5...

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April 27, 2015

I testified last week to the newly established Connecticut Tax Review Panel, which is undertaking a comprehensive look of the state’s tax system throughout 2015. Co-chaired by former Rep. Bill Dyson (D) and former Sen. Bill Nickerson (R), the panel has been instructed by the Legislature to consider and evaluate options for state and local revenue system reform. The current goal is to complete a final report by February 23, 2016, although they may move that up to January.

As its first...

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April 27, 2015

From Margaret MacMillan’s The War That Ended Peace (p. 228), on the state of the crumbling, top-heavy Austrian Empire near the turn of the 20th century:

“A single tax payment in Vienna went through the hands of twenty-seven different officials. In the Adriatic province of Dalmatia, a commission set up to report on ways to improve the bureaucracy discovered that the collection of direct...
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April 27, 2015

The United States is the only country in the developed world that taxes its citizens who live in foreign countries.

The U.S. taxes Americans abroad on worldwide income and requires them to file their taxes with the U.S., in addition to the country in which they reside. Though Americans abroad are exempt from U.S. taxes on their first $97,600 of foreign income to provide some relief, the tax is still without merit.

In a recent editorial, the editors at Bloomberg View made the...

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April 27, 2015

Sometimes people mention Tennessee on the list of states without an income tax, but residents there will tell you that’s not entirely true. Tennessee has a unique tax on interest and dividends, named the “Hall tax” after Frank Hall, the state senator who ushered the tax into existence in 1929.

For the last two years, legislative efforts led by Senator Mark Green (R) have been undertaken to try to repeal...

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April 27, 2015

Last week, I testified before Florida Senate Appropriations Committee and met with members of the Florida House to discuss the poor economics of film incentives.

After years of the film industry reporting incredible returns on investment—often 5-to-1 or better—for state film tax credits, state revenue offices and legislative bureaus are increasingly turning a critical...

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April 24, 2015

At NPR’s Planet Money, Quoctrung Bui has put together an attractive and interesting data visualization on real income growth in the United States. As he describes it, there are two distinct eras for income growth since 1917:

In the first phase, known as the great compression, inequality fell. Incomes...

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April 24, 2015

We did it!

Today – April 24th – is the day Americans as a whole have worked long enough to pay off their tax bill for the year.

In 2015, American’s will pay $4.85 trillion in taxes of all kinds to federal, state, and local governments. This amounts to 31 percent of the nation’s income in 2015 and 114 days into the year.

Federal taxes account for $3.28 trillion of the tax bill,...

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April 22, 2015

This week’s map shows top corporate marginal tax rates in each state (full report on state corporate income tax rates: here). Corporate income taxes vary widely, with Iowa taxing corporate income at a top rate of 12.0 percent (though the state offers deductibility of federal taxes paid), followed by Pennsylvania (9.99 percent), Minnesota (9.8 percent), Alaska (9.4 percent), the District of...

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April 22, 2015

Double taxation and the heavy tax burden on corporate profits has created a couple of distortions in the U.S. economy. One such distortion is that corporations often prefer to choose debt financing rather than equity financing. This is because the current tax code treats debt financing more favorably than equity financing. Specifically, equity financing faces two layers of taxation...

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April 21, 2015

This post originally appeared as an op-ed on Forbes here.

Last week, Ohio House leadership introduced a substitute bill to Governor Kasich’s proposed budget that would make many notable improvements to the tax plan. This is good news, because the proposed tax plan that came from the Kasich administration was deeply in conflict with itself.

The...

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April 20, 2015

Imagine running a small business and being assessed a penalty by the IRS. Then imagine being told by the IRS that the only way to avoid the penalty is to commit a serious felony, laundering money. This Kafkaesque nightmare actually became reality for a Colorado marijuana dispensary called Allgreens when it tried to pay its federal payroll taxes.

Generally speaking, in the United States, cash is legal tender for all debts,...

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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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