Blog Post Round-Up

July 28, 2008

  • McCain: Please Stop with the Gas Tax Holiday Talk: It’s common for politicians (on both sides) to take shots at economists like McCain did in this interview, arguing that they are heartless and don’t understand the plight of hard-working Americans who don’t get to sit behind a desk all day.[…] It’s a baseless argument designed to distract from the core question, which in this case is “will the price at the pump fall significantly from a temporary reduction in the federal gas tax?” The answer is no. A gas tax holiday is truly a gimmick…maybe worse than Obama’s worst gimmick which is exempting all senior citizens making under $50,000 from paying income tax.
  • Will the 1040 Be 3 Pages Next Year?: The housing bill that Congress is set to pass and the President is now willing to sign is set to add a number of lines to the standard 1040, including a deduction for property taxes paid that will likely be in the adjustments section yet only available to non-itemizers (above-the-line deduction) or beneath or part of the standard deduction. And then there is the new credit for homeowners that must be repaid in future years.[…] So you can count on probably around four new lines on next year’s 1040, which could force it to finally be 3 pages, unless the IRS merges some of the credits and deductions together as it has done in the past. Or maybe the font next year will be smaller.
  • Sales Tax Holidays: Politically Expedient but Poor Tax Policy: Despite tax holidays being one of the least desirable forms of tax relief, many states are now doing them. Below is a list of holidays compiled by the friendly people at the Commerce Clearing House (CCH), with some slight updates by us.
  • Has Real Median Household Income Fallen Since 2000?: To give you an illustration of this problem of defining income, the table below show how the change in real incomes from 2000 to 2006 looks under 15 alternative definitions of income derived by the Census Bureau using CPS data.
  • American Airlines Case in New York Highlights Problems with Hotel Taxes: If you’ve stayed in a hotel room in the United States, you probably paid tax on it. Not just your share of the hotel’s property tax and income taxes (embedded in the price), and not even the sales tax imposed on the transaction. Virtually every city (or other local government unit) imposes a separate (higher) tax on hotel stays.
  • Multiple-Choice Tax Proposal in Florida: The Florida Taxation and Budget Reform Committee placed an amendment on the upcoming ballot to eliminate the school portion of local property tax. According to one estimate, property owners would save $9.3 billion in 2011. But as the Jacksonville Business Journal reports, not everyone is happy about the measure.
  • Tax History Lesson: The McKinley Tariff: Before becoming president, William McKinley served in the House of Representatives, representing Ohio. He was a fan of tariffs, and a large part of his legacy is the tariff bill passed in 1890, introduced in a committee he chaired. It became known as the McKinley Tariff.

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