Lunch Links: Toll Roads Reduce Non-Tolled Traffic, KU Coach Uses Kansas Tax Break, Labor Department Overtime Rule

May 18, 2016

Today is May 18, the first anniversary of the U.S. Supreme Court’s decision in Maryland v. Wynne, where they definitively ruled that state tax powers do not extend to harming interstate commerce by levying extra taxes on residents engaged in interstate commerce. The line-up was an unusual one: Chief Justice Roberts and Justices Alito, Kennedy, Breyer, and Sotomayor restraining state tax powers; Justices Thomas, Ginsburg, Scalia, and Kagan supported the state action.

Here are some interesting links I came across:

  • States Are Losing Out on Billions of Dollars By Keeping Pot Illegal: Washington Post coverage of our new study on the lessons learned from marijuana legalization in Colorado and Washington. (Washington Post)
  • Colorado Governor Says Marijuana Legalization Working: Gov. Hickenlooper (D) wasn’t a fan originally but he said none of his fears have been realized and legal marijuana was “not as vexing as we thought it was going to be.” (Los Angeles Times)
  • Colorado’s Tolled Express Lanes Do More Than Just Cut Traffic: HOT lanes – where non-HOV drivers pay to access a lane with less traffic – on US 36 and I-70 have proven successful and expansions are being planned. On I-70, traffic in even the non-tolled lanes dropped 18 percent after the toll lanes opened as part of a test with federal officials. (Federal law generally prohibits tolls on most interstate highways.) (Denver Post)
  • Texas Supreme Court Upholds Education Funding System: A unanimous state supreme court declined to interpret the state constitution to require higher education spending (and thus higher taxes). Other states have been not as fortunate, with decades-long lawsuits, overseen by judges struggling to understand why money and outcomes aren’t always the same thing. (Texas Tribune / Tax Foundation)
  • Local Income Tax Proposal in Olympia, Washington: A proposed ballot initiative would impose a 1.5 percent income tax on household income over $200,000, with the estimated $2.5 million used to pay for community college tuition for local high school graduates. Washington state has no income tax. (The Olympian)
  • New Jersey Debates Gas Tax Increase, Earned Income Tax Credit Boost: The talk is boosting the second-lowest-in-the-country gas tax, currently at 14.5 cents per gallon, but also boosting the EITC from 30 percent of the federal EITC to 40 percent. Raising the gas tax is a third rail in New Jersey but its transportation funding sources are nearly exhausted. (New Jersey Spotlight)
  • KU Coach Shows How Pass-Through Exclusion Warps Economy: University of Kansas men’s basketball coach Bill Self earns a salary of just $230,000, because the other $2.75 million is structured as “professional services rendered” under an LLC pass-through. Still the same coach, though, with no new jobs created. Kansas exempted pass-through income from tax, and the number of pass-throughs has swollen from 191,000 to 334,000. (KCUR)
  • Why Foreign Buyers Are Snapping Up U.S. Companies: In an op-ed, James Carter and Ernest Christian argue the U.S. tax code is uncompetitive. In 1986, 218 of the world’s largest 500 corporations were based in the U.S.; today, it’s 128. (Wall Street Journal)
  • Labor Department Final Rule on Overtime Exemption: It’s not tax-related but it’ll affect a lot of businesses and employees. The Labor Department has issued its final rule raising the threshold for exempting employees from overtime pay, from $23,660 to $47,476, effective December 1, 2016. That sets it at the 40th percentile of full-time salary earnings in the lowest-wage region of the country, automatically adjusted every three years. (Department of Labor)

Also, be sure to check out our new map on property taxes by county.

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