Links: Self-Employment Taxes, Marijuana Tax, and the Tax Reform Road Show

August 20, 2013

Denver is in the process of figuring out at what rate to tax marijuana, which Colorado legalized last year. The city council is leaning towards asking voters for a 3.5 percent tax on marijuana sales within the city. Voters will vote on the tax rate in a November ballot.

While Congress is discussing tax reform, states are passing tax reform. Driving many of these reforms is a desire in the states to improve economic growth.

Sen. Max Baucus and Rep. Dave Camp are on the road again to promote a tax code overhaul. It’s more of a listening tour at this point, with the chairmen of the tax writing committees soliciting input from business owners about the best path forward. The chairmen are in agreement that tax reform should promote economic growth, create jobs, and improve U.S. competitiveness. But Senate Democrats’ desire for $1 trillion in additional revenues could prove a difficult gap to bridge.

If you’re a small business owner, do you owe the self-employment tax? “[F]or 2013, a self-employed person owes [self-employment] tax at a whopping 15.3% rate on the first $113,700 of SE income.”

If you plan to retire anytime soon, you might want to consider the states with the best (tax) climates. This story looks at retired life in the state of Washington. For starters, they don’t have a state income tax.

This article nicely points out that not all tax cuts and “pay fors” are created equally – some tradeoffs can even damage growth. Instead, tax reform must focus on changes that encourage economic growth above all else.

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