Lunch Links: Sales Tax Holidays in 12 States This Weekend; Trump’s Economic Team; Greeks Business Face Punitive Taxes
August 5, 2016
Today is August 5, the 107th anniversary of the U.S. corporate income tax being signed into law by President Taft. Northeastern Republicans favored high tariffs, while western and southern Republicans wanted to reduce tariffs and instead impose an income tax. The corporate tax (and a proposed amendment that became the 16th Amendment authorizing an income tax) was the political compromise. The tax started at 1 percent; today it’s 35 percent, the highest in the industrialized world.
Here are some interesting links I came across:
Back to School Sales Tax Holidays This Weekend: It’s the first day of weekend sales tax holidays in Alabama, Florida, Iowa, Louisiana, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Texas, and Virginia. Arkansas starts tomorrow. Retailers lobby for these to get you jazzed up about a tiny 5-to-7-percent-off sale by advertising it as “tax-free!!!” Take advantage of them, but *be sure* to review the convoluted lists of what qualifies and what doesn’t (the links above), and be careful of retailers who raised their prices this weekend to take advantage of all the people storming their stores for tax-free shopping (higher demand + same supply = higher prices). (Tax Foundation / various state revenue departments)
Tax Foundation Analyst Supports Taxing Olympic Prize Money: When we say no special tax breaks for anyone, we in fact mean *anyone*. My colleague Kyle Pomerleau criticizes the proposal by Sen. Chuck Schumer (D-NY) to exempt the $10,000 or more Olympic medal prize money from tax, asking why prize money should be exempt while, say, teacher’s salaries are taxed. (The Hill / Tax Foundation)
Trump Announces Economic Team: “Members of the economic team include individuals with unparalleled experience and success in business including Tom Barrack, Andy Beal, Stephen M. Calk, Steve Feinberg, Harold Hamm, Howard Lorber, Steve Mnuchin, John Paulson, Wilbur Ross, and Steve Roth. Additionally, the team includes highly respected advisers Dan DiMicco, David Malpass, Stephen Moore, and Peter Navarro. Working with the Advisory Council will be the campaign’s policy team [which] will be led by National Director of Policy, Stephen Miller, and Deputy Director, Dan Kowalski.” (Trump Campaign)
Primer on Payroll Taxes: My colleague John Olson explains who that FICA so much of your paycheck goes to is. (Tax Foundation)
Greeks Facing Punitive Tax Burdens: While austerity cuts to government spending in Greece get a lot of attention, the high tax burden gets less notice. The Kathimerini newspaper recently calculated that new tax increases will result in landlords paying over 100 percent of their income in tax, self-employed individuals making about $11,194 a year will pay 60 percent to 74 percent, and partnerships will keep less than a quarter of their profits. Taxes on hotels, fuel, landline telephone and broadband services, cigarettes, alcohol, coffee, and paid television are also going up. (Wall Street Journal)
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