Lunch Links: California Moves Ahead With Marijuana While Vermont Doesn’t, Trump on Taxes, New York City Bag Fee
May 6, 2016
Today is May 6, the date in 1862 when Henry David Thoreau passed away. Thoreau famously refused to pay his taxes because of his opposition to war and slavery, spending a night in jail until someone paid his overdue taxes for him.
Here are some interesting links I came across:
- Trump Backs Away From Elements of His Tax Plan: My colleague Alan Cole makes some suggestions. Meanwhile, Trump surrogate Ben Carson told MSNBC that the presumptive Republican nominee will release his tax returns before the election. (Tax Foundation / Politico)
- California Will Vote on Marijuana Legalization: Supporters of the proposal, which would impose a 15 percent tax on retail marijuana sales, have gathered 600,000 signatures to put it on the November 8 ballot. (NBC Bay Area)
- Vermont House Rejects Marijuana Legalization: The bill, which would have imposed a 25 percent tax on retail marijuana sales, failed 28 to 121. The Senate had passed the bill and Gov. Shumlin (D) was eager to sign it. An alternate proposal to hold a non-binding state referendum was rejected 51 to 97. Instead, an advisory commission will look into future legalization. (WPTZ Channel 5 / Associated Press / Marijuana.com)
- Connecticut Policymakers Reach Budget Deal: A $960 million shortfall caused by income tax revenue failing to meet projections will be covered by $830 million in spending cuts and $130 million in one-time revenues. $260 million from the rainy day fund was used to plug this year’s gap. Connecticut had passed a major business tax increase in 2015, followed soon after by the departure of General Electric from the state. (Wall Street Journal / Tax Foundation)
- Atlantic City Nears Bankruptcy as Legislative Action Stalls: Senate President Stephen Sweeney (D) has a bill to allow the state to terminate the city’s labor contracts, restructure debts, and dissolve agencies. Assembly Speaker Vincent Prieto (D) prefers an alternative that would set up a joint state-city commission to develop a financial plan, to be administered by a special master named by the state Chief Justice. Governor Christie (R) supports the Sweeney bill and has promised to veto the Prieto bill, and said yesterday Atlantic City will run out of cash in ten days. (Philadelphia Inquirer)
- New York City Adopts 5 Cent Plastic Bag Fee: It’s not a tax because the money will stay with retailers rather than going to government, but plastic bags will cost you a nickel in the Big Apple starting October 1. The vote was 28 to 20 and Mayor de Blasio is expected to sign it; Erin Durkin of the Daily News tweeted the play-by-play. (ABC / New York Daily News)
- New York Court Rejects Challenge to Property Tax Cap Law: The New York State United Teachers union challenged the state’s flexible 2 percent property tax cap, alleging violations of (1) the state constitution’s Education Article, for providing inadequate education funding; (2) the federal and state guarantees of equal protection, due to resources for education varying by school district; and (3) violation of due process by depriving taxpayers of the right to vote for higher taxes than permitted by the tax cap law, and the right to free speech by denying income tax benefits unless the school district adheres to the tax cap. The Court dispensed with all the arguments easily, ruling the tax cap is within the government’s power, and only deprivation of educational opportunities is a justiciable claim. One judge dissented from that latter point. E.J. McMahon of the Empire Center summarizes the ruling. (Albany Times-Union / New York State United Teachers v. State of New York, No. 521358 (N.Y. App. 3rd May 5, 2016) / Empire Center)
- Cyber Thieves Siphon Tax Forms from ADP Payroll Data: Around a dozen of the payroll company’s clients were affected. Thieves exploited a tool to download past W-2 forms, which ADP has disabled. Federal officials are investigating. (CNN Money)
- How Does Capital Gains Taxation Affect Entrepreneurial Activity?: My colleague Huaqun Li reviews a new study by Professor William Gentry that finds the “lock-in” effect caused by capital gains taxes upon sale of the asset (realization) changes capital investment, perhaps offsetting the incentive of the lower tax rate. (Tax Foundation)
And if you missed it, yesterday we released our new book, Iowa Tax Reform Options: Building a Tax System for the 21st Century.