Lunch Links: Maryland Property Tax Hike, No Maine Marijuana, Do Millionaires Move Because of Taxes?

May 27, 2016

Today is May 27, the date in 1935 when a unanimous U.S. Supreme Court decided Schechter Poultry v. United States, striking down the New Deal’s National Industrial Recovery Act. The Act directed industry trade associations to develop codes of fair competition for each industry, and violations of the codes could be criminally prosecuted. The Schechters, two brothers who ran a Kosher chicken coop, refused to comply with the Code’s provision that they sell chickens as they were grabbed rather than by quality (hence the case’s nickname of the “Sick Chicken” case). The Supreme Court ruled the Act was unconstitutional on two grounds: (1) it was beyond Congress’s commerce clause power, since the Schechters only sold intrastate and (2) Congress unlawfully delegated its legislative power to the executive branch.

Here are some interesting links I came across:

  • Trump Definitely Now Presumptive Republican Nominee: He now has the 1,237 delegates needed to win the party’s nomination on the first ballot. (Morning Consult)
  • Tax Foundation President on The Need for Tax Reform: In congressional testimony yesterday, my boss Scott Hodge explained the costs of our complex tax code but also offered hope: “there are many valid ways of ridding the tax code of its worst parts and creating a tax system that boosts economic growth, creates jobs, and lifts living standards.” (Tax Foundation)
  • Maine Governor Not a Fan of Legalizing Marijuana: “I can’t figure out how you are going to tax something you grow in your backyard, I just can’t figure that out,” said Gov. LePage (R). Our recent study reviews the marijuana taxing experience in Colorado and Washington. (Maine Public Broadcasting / Tax Foundation)
  • Montgomery County, Maryland Approves 9 Percent Property Tax Increase: The extra taxes, adding $326 to the average bill, will pay for a boost in education spending and public subsidies for political campaigns. In return, the schools promise to cut a planned teachers’ raise from 8 percent to 4.5 percent, though the union may ally with Republicans to push through a term limits initiative if that happens. (Washington Post)
  • Alabama Approves Tax Incentive Evaluation Law: The new law requires state agencies to set goals for incentives they administer, and evaluate them every four years. (Pew Center on the States)
  • New Study on Whether Millionaires Move Because of Taxes: The study looks at IRS data from 1999 to 2011 and finds a very small (2 percent) but persistent number of rich people move for tax reasons. Notably, they find that a 10 percent tax hike measurably boosts outflows, but also find lower-income people move more frequently than high-income people. Key caveats are the report didn’t look at migration inflows, nor did it control for, well, anything. The authors also emphasize the draw of warm weather, while conceding that income-tax-free Florida is a much more popular migration destination that income-tax-heavy-but-just-as-sunny California. Millionaires in Texas and Florida don’t seem interested in leaving those states, which shouldn’t be a surprise, so the percentage of millionaires moving *from high-tax states to low-tax states" is higher than 2 percent. The paper just came out, so expect to see more commentary on it. (American Sociological Review / Lyman Stone)

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