Lunch Links: Tennessee Repeals Hall Tax, Sanders Spending Plans, Puerto Rico on Calendar
May 23, 2016
Today is May 23, the date in 1938 when the U.S. Supreme Court upheld the imposition of federal income tax on state employees in Helvering v. Gerhardt. Conceding that McCullough v. Maryland in 1816 ruled that states couldn’t tax the federal government, Justice Stone wrote that the feds taxing the states was something completely different: “in laying a federal tax on state instrumentalities, the people of the states, acting through their representatives, are laying a tax on their own institutions, and consequently are subject to political restraints which can be counted on to prevent abuse.” Justices Butler and McReynolds dissented, writing that the feds increasing state costs necessarily curtails functions essential to their existence.
Here are some interesting links I came across:
- Tennessee Governor Signs Hall Tax Repeal into Law: Gov. Haslam (R) signed the bill Friday night. The law phases out Tennessee’s 6 percent tax on dividend and interest income, reducing it a point a year beginning with tax year 2016. Thus, in 2022, Tennessee will become only the second state in U.S. history to repeal an income tax. (The Tennesseean / Tax Foundation)
- Mississippi Franchise Tax Repeal Will Boost Competitiveness: Douglas Lindholm of the Council on State Taxation writes an op-ed praising the recent cut as a “responsible, prudent, and measured first step in resolving Mississippi’s long-term fiscal problems.” (Jackson Clarion-Ledger)
- Detroit and Chicago Lose Population in New Census Update: Denver, Austin, Charlotte, Fort Worth, San Antonio, and Seattle all grew the most. If the trend continues, Chicago may slip behind Houston to be America’s third-largest city (after New York and Los Angeles). (Governing / Illinois Policy Institute)
- Michigan’s Repealed Tax Credits Continue to Hurt State Treasury: Michigan overhauled its complicated business tax system in 2011, but has kept paying out credits it had promised under the old system. This year, the legacy credits will cost $1.03 billion, overtaking corporate tax collections of $932 million. Gov. Snyder (R) renegotiated many of the credits last year to reduce long-term liability. (Detroit News)
- Nevada Commerce Tax Repeal Effort Goes Ahead: A judge approved revised petition language, after the state supreme court said it had to be clearer about the revenue impact of repealing the modified gross receipts tax. Supporters have until June 21 to get the required 55,234 signatures. (Associated Press)
- Biden Praises Toll-Funded Construction in Rhode Island: The state’s RhodeWorks program uses toll revenues to replace bridges and roads. Vice President Biden will appear with Governor Raimondo on May 27. (Providence Journal)
- Hatch Not Interested in Impeaching IRS Commissioner: The Senate Finance Committee chairman said he may disagree with IRS Commissioner John Koskinen but that doesn’t make it an impeachable offense. (The Hill)
- Sanders Spending Plans Revised Upwards: The Committee for a Responsible Federal Budget says the Sanders platform would raise taxes $15.25 trillion and raise spending $31.25 trillion, for a net deficit increase of $18.8 trillion. Stabilizing the debt under the Sanders plan would require 5.4 percent economic growth, compared to the 2.1 percent currently projected. (Committee for a Responsible Federal Budget)
- House Committee Schedules Puerto Rico Markup: The House Natural Resources Committee will consider the bill, which sets up an oversight control board for Puerto Rico, on Tuesday at 5pm. Treasury Secretary Jack Lew described the bill as a “fair, but tough bipartisan compromise.” (U.S. House Committee on Natural Resources / Morning Consult)
And three Pennsylvania mayors walk into an elevator… and get stuck for 40 minutes.