Lunch Links: California Income Taxes Under Projection, Kansas Bond Downgrade, IRS Hiring More
May 4, 2016
Today is May 4, which is Star Wars Day (“May the Fourth be with you.”) Lest we forget, taxes are a crucial plot element in the Star Wars saga. Here are some interesting links I came across:
- California Income Taxes $1 Billion Under Projection: The state’s Legislative Analyst’s Office (LAO) pegged the April collections at $13.6 billion, compared to a $14.6 billion projection. They blame the stock market drop earlier this year, saying California’s income tax is so focused on high-earnings that it is greatly affected by market changes. Full-year estimates will come out later in the month, and the state has sufficient reserves to cushion the drop. (California LAO Blog)
- Moody’s Downgrades Kansas from Stable to Negative: The downgrade cites “[o]ngoing difficulties balancing budget with recurring measures after tax cuts.” Last weekend, legislators rejected a proposal to roll back the state’s tax exclusion for pass-through income, instead directing Governor Brownback (R) to find savings on the spending side. Standard and Poor has put Kansas on a credit watch, suggesting a downgrade there might be next. (Associated Press)
- Illinois Graduated Income Tax Proposal Delayed in House, Expected to Come Up Wednesday: The vote on the proposal didn’t happen yesterday but the sponsor says he’ll bring it up today. Action has to occur this week for it to make the November ballot. Governor Rauner calls the proposal “the straw that breaks the camel’s back for Illinois’s economic competitiveness.” (State Journal-Register / Southern Illinoisan)
- IRS to Hire Up to 700 Enforcement Workers: IRS Commissioner Koskinen says retirements and other efficiencies enable the hiring. The agency currently has 17,208 employees doing tax enforcement out of some 90,000 total employees. (Wall Street Journal)
- Clinton Backs Manchin Plan to Tax Opioids: Hillary Clinton praised the 1-cent-per-mg-of-active-ingredient tax, with the $2 billion it is calculated to raise to be used for substance abuse treatment. (CNN / Senator Joe Manchin)
- Bloomberg Joins the Philadelphia Sugary-Drink-Tax Campaign: The group pitching the 3-cent-per-ounce tax in Philadelphia announced an $825,000 ad buy and that Michael Bloomberg has contributed to the effort. The ad, which you can see here, is mostly pictures of adorable children. Opponents are running this ad. (Philadelphia Inquirer / Philadelphians for a Fair Future / Philadelphians Against the Grocery Tax)
- Proposed Pennsylvania Severance Tax Among the Nation’s Highest: Governor Wolf (D) has pitched an 8.5 percent tax, compared to 5.4 percent in Oklahoma, 5 percent in West Virginia, and 1.1 percent in Ohio. The state’s Independent Fiscal Office projects that the tax will reduce production by 8 percent. (Pittsburgh Post-Gazette)
- Blackstone CEO Calls for Flat Tax: Get rid of all the deductions and tax everything at one or two rates, said Stephen Schwarzman of the large private equity firm. (CNBC)
- NFIB vs. Treasury Secretary Lew: At a Milken Institute event, Treasury Secretary Jack Lew blamed the National Federation of Independent Business for blocking a tax reform deal between President Obama and congressional Republicans. NFIB fired back, saying it wasn’t tax reform. (NFIB)
- Guess How Many People Pay Taxes in India: Give up? 12 million people, or about 1 percent of the population. However, it’s increased by 25 percent since 2011. (CNBC)
- Ex-D.C. Juvenile Justice Worker Sentenced in $42 million Tax and ID-Theft Ring: In 2001, Marc Bell earned praise for leading a program to keep youths out of jail, but now he faces four years in prison for providing identity thieves with personal information on 645 young offenders that was used to obtain fraudulent tax refunds. (Washington Post)
And since this came up on Twitter yesterday, a reminder that there is a law that says you have to pay federal income tax.
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