Here are some great links from this week:
- The Texas Public Policy Foundation has a new report about repealing the Texas Margin Tax. They find repeal would produce $10.8 billion in new real personal income in the first year and $16 billion over 5 years. The state would be one of just four states without direct business taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. or individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. . We have some similar findings in our paper on the Texas Margin Tax here.
- Barbara Shelly at the Kansas City Star has a review of the Kansas income tax exclusion for pass through entities that blew a hole in the budget. Kansas expected 191,000 people to take advantage of the exclusion, but 333,000 people ended up taking it, for a loss of $207 million in revenues. I testified today to the Ohio House Ways & Means Committee on a similar provision being considered by Gov. Kasich.
- Jason Mercier of the Washington Policy Center noticed that the Washington Department of Commerce has pulled “no capital gains taxA capital gains tax is levied on the profit made from selling an asset and is often in addition to corporate income taxes, frequently resulting in double taxation. Capital gains taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment. es” from its list of reasons to live in Washington. Gov. Inslee and others have proposed taxing it, and the Commerce Department doesn’t want to be “disingenuous.” More on Washington from my colleague Jared Walczak.