Lunch Links: Puerto Rico Municipal Bankruptcy Law Voided; West Virginia Cigarette Tax; Federal Student Tax Scam
June 13, 2016
Today is June 13, the anniversary of the enactment of the War Revenue Act of 1898, funding the Spanish-American War with bond sales, a graduated estate tax, and new or expanded excise taxes on beer, alcohol, perfume, cosmetics, and telephone calls. While many of the taxes were repealed after peace with Spain, the federal tax on long-distance telephone calls hung on long after, ultimately being repealed in 2006.
Here are some interesting links I came across:
- Supreme Court Voids Puerto Rico Municipal Bankruptcy Law: Puerto Rico has saddled its municipalities and utilities with more than $20 billion of its $70 billion outstanding debt, and passed a law authorizing them to enter bankruptcy. This law, however, conflicts with federal bankruptcy law and so the law is void. Justice Thomas delivered the 5 to 2 opinion; Justices Sotomayor and Ginsburg dissented, citing the island’s humanitarian crisis; Justice Alito recused himself. (U.S. Supreme Court)
- IRS Strips Tax-Exempt Status from Museum Scam: The Texas Highway Patrol Museum had an official-sounding name but was little more than a telemarketing scam, collecting $12 million in donations that were grossly misused. The Texas Attorney General shut the “museum” down for fraud in 2012; the IRS got around to the tax-exempt status revocation today, retroactive to 2015. (Bloomberg BNA / My San Antonio)
- West Virginia Budget Debate Continues: Over the weekend, the Senate and a House committee approved a 65-cent tobacco tax increase, and the House will consider it today. Legislators had previously rejected a broad-based sales tax increase, so now it looks like the smokers will pay. (Huntington Herald-Dispatch)
- Philadelphia Soda Tax Machinations: Ryan Briggs details the deal-making that led to the Philadelphia City Council preliminarily approving a 1.5 cent per ounce tax on sweetened beverages last week. Council President Darrell Clarke is taking credit for brokering the deal, but others disagree. (City & State Pennsylvania)
- New Jersey Transportation Proposal: Legislators are looking to raise the gas tax from the second-lowest-in-the-country 14.5 cents per gallon to 37.5 cents per gallon. The state’s transportation trust fund is nearly broke after years of kicking the can down the road on lasting funding. (Tri-State Transportation Campaign)
- Michigan Seeks Changes to Retail Property Tax Assessments: After retailers successfully argued average sales should reduce their property tax bills, legislators are looking to change the policy. (Detroit News)
- Consumer Reports Warns About IRS Phone Scam: If someone calls, claiming they’re from the IRS and asking for personal information relating to the “federal student tax,” it’s a scam. (Consumer Reports)
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