Articles Round-Up

April 18, 2009

I’m just now getting caught up on e-mail, after a very busy month of tax law and state tax policy. Here are some interesting articles that all deserve their own blog post if only there was more time:

  • This Christian Science Monitor piece looks at the renewable energy tax credit passed as part of the stimulus package. The 30 percent credit is for purchase and installation of renewable-energy products in 2009 and 2010 only. Check out math-intensive IRS Form 5695 for caps and eligibility. Of course, if renewable energy saves money and beats competitors in all ways, tax credits shouldn’t be needed to have consumers use them. Another perspective is to view the credits as guaranteed profits for the manufacturers of the equipment.
  • California Assemblyman (and former San Francisco county supervisor) Tom Ammiano introduced a bill to legalize and tax marijuana. The Drug Policy Alliance Network stated: “Annual revenues from fees and excise taxes could be in the billions, and Californians could save another billion a year that they now spend on marijuana prohibition.” Of course, that’s a secondary argument for them; if the War on Drugs is a violation of freedom, marijuana should be decriminalized whether it raises tax revenue or not. One must also be careful not to impose such a high tax that it drives the buying and selling underground, undermining the very reason for legalization. California wouldn’t be the first state to tax marijuana (about 20 states do so now, but only to add one more charge-tax evasion-to arrestees), and the ancestor to the War on Drugs was the Marihuana Tax Act of 1937, which lasted until 1969.
  • This Wall Street Journal piece looks at tax increase proposals at the state level.
  • National Taxpayer Advocate Nina Olson eloquently explains why we need a simpler tax code. According to her office’s estimates, taxpayers and businesses spend 7.6 billion hours a year complying with the tax code, and that code saw 500 changes in 2008 alone.
  • The Wall Street Journal editorialized against a proposal in Oregon to raise their beer tax 1800%. We’ve covered this issue here and here. I’m quoted in the editorial as warning that Oregon’s microbrewery industry (see map here) exists because of the low beer tax and would be endangered by such a huge increase.
  • The New York Post concluded that eleven federal, state, and local taxes and fees add as much as 33% to the cost of a New Yorker’s cell phone bill. Cheaper plans are taxed more heavily due to some per-line taxes and fees. We last looked at the multiplication of cell phone taxes here.
  • No one applied to collect a tax credit offered in Philadelphia to businesses who hire released criminal offenders. The credit covers costs up to $10,000 per offender, but with three deal-breaking conditions: (1) companies must provide tuition support and vow to remain in Philadelphia for at least five years; (2) the ex-offenders must give 5% of their paychecks to the city; and (3) the pay required in some cases amounts to higher than other employees are paid.

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