Lunch Links: IRS Impeachment, State Tax Updates, and Why the California Teamsters Oppose Marijuana Legalization

May 24, 2016

Today is May 24, the date in 1937 when the Supreme Court upheld Social Security (and Social Security and unemployment insurance payroll taxes) in Helvering v. Davis and Steward Machine Co. v. Davis. In Helvering, the Court held 7 to 2 that Congress could spend to promote the general welfare independently of other provisions of the Constitution, deciding a dispute going back to Hamilton and Madison. In Steward Machine Co., the taxes were upheld 5 to 4 against a Tenth Amendment challenge. Today, U.S. employers and employees pay a combined 12.4 percent Social Security tax. (Unemployment taxes vary by state, and the Medicare tax is 2.9 percent.)

Here are some interesting links I came across:

  • House Judiciary Committee Begins Impeachment Hearings of IRS Commissioner: The charges focus on failing to preserve documents and not telling the full truth to Congress. Commissioner Koskinen won’t be testifying, writing yesterday that the allegations lack merit. (Politico)
  • Cyprus Credits Economic Growth to Cutting Spending, Not Increasing Taxes: "We didn't raise taxes that would burden an already strained economy," Cypriot Finance Minister Harris Georgiades told the Associated Press. "We found spending cuts that weren't detrimental to economic activity." Cyprus received an €10 billion international bailout in 2013. (Associated Press)
  • Louisiana Speculates on June Tax Special Session: Gov. Edwards (D) may call legislators back to look at tax and spending priorities. A number of reports may help them. (The Advocate / American Press)
  • Illinois at the Crossroads?: Diana Sroka Rickert writes in the Chicago Tribune that “[t]he budget standoff represents two competing philosophies in Illinois. One side believes our state is in crisis and needs fundamental reforms to grow and prosper. The other side says things are working just fine, thank you — oh, and let's raise taxes again.” (Chicago Tribune)
  • Talking Pennsylvania Taxes: Philadelphia Inquirer columnist John Baer praises our new chartbook on Pennsylvania’s tax system, and notes that there’s a lot the Wolf Administration and legislators could support together. (Philadelphia Inquirer)
  • Connecticut Departures Due to Estate and Gift Tax: James Smith writes in the Hartford Courant that the Connecticut estate and gift tax is encouraging the wealthy to restructure their way out of it. Connecticut residents who earn over $1 million paid over 40 percent of Connecticut’s federal income tax payments, the highest of any state. (Hartford Courant)
  • Oklahoma Sales Tax Increase Campaign Kicks Off: The proposal would raise the sales tax above 9 percent to fund education. (NewsOK)
  • Analysis Finds Proposed Oregon Business Tax Would Be Borne by Consumers: The state Legislative Revenue Office yesterday released its analysis of IP28, the 2.5 percent gross receipts tax headed for the November ballot. The study concludes that individuals would face higher tax burdens, higher costs, and lower after-tax income. The state would lose 38,000 private-sector jobs. (Oregon Legislative Revenue Office / Tax Foundation / Portland Tribune / Eugene Register-Guard)
  • Case Studies of State Tax Reform: The Mercatus Center summarizes and evaluates recent state tax reforms in Utah, Rhode Island, Michigan, Kansas, and North Carolina. (Mercatus Center at George Mason University)
  • Teamsters Join California Anti-Marijuana Coalition: It’s no surprise that the prison guard union and farmers are opposing the ballot initiative to legalize marijuana in California, but the Teamsters are joining the opposition effort as well. Their reason: the proposal doesn’t require distributors to be independent of growers or retailers, thus allowing them to use their own warehouse workers and truck drivers instead of Teamsters. (Buzzfeed)

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