Lunch Links: Trump on Carbon Taxes, Taxes on Beer and Pizza, and DC Tax Changes

May 16, 2016

Today is May 16, the date in 1927 when the U.S. Supreme Court upheld the federal income tax against a challenge that making someone pay tax on illegal income violated the Fifth Amendment right against self-incrimination. In United States v. Sullivan, a liquor bootlegger failed to include his illegal income on his tax return. Justice Oliver Wendell Holmes, writing for a unanimous court, concluded that income tax is owed just as much on illegal income as on legal income, and that the Fifth Amendment didn’t let the taxpayer off the hook from filling out the tax return at all:

“If the form of return provided called for answers that the defendant was privileged from making, he could have raised the objection in the return, but could not on that account refuse to make any return at all.[…] He could not draw a conjurer's circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law.”

Here are some interesting links I came across:

  • Trump Opposes Carbon Tax: After initial reports suggested that Rep. Kevin Cramer (R-ND) said he hoped to convince Trump to support a carbon tax, Cramer said he wouldn’t recommend such a tax and Trump tweeted that he will not support it. (The Hill / Washington Examiner / Twitter)
  • Romney Tax Return Extortionist Found Guilty: Trump’s tax returns and tax plan are in the news, but so are Mitt Romney’s tax returns: a judge found Michael Mancil Brown guilty of all charges. Brown in 2012 demanded $1 million in Bitcoin or else he would release Mitt Romney’s tax returns that he claimed to have stolen from PricewaterhouseCoopers. He was lying, but his attempted extortion will get him up to 25 years in prison and up to $250,000 in fines. (Forbes: Kelly Philips Erb)
  • Why is Beer So Expensive?: Professor Peter Jaworski of Georgetown University says that 44 percent of the price of a beer is taxes. (IHS LearnLiberty)
  • Kansas Governor Tries to Halt Tax Appeal by Pizza Millionaire: Pizza millionaire Gene Bicknell disputes a $42 million tax bill from the state of Kansas, and is suing to get his money back. Gov. Brownback (R) attempted to limit taxpayer appeal rights to just property taxes, which would have halted Bicknell’s appeal. Kansas is projected to only have $81 million in cash by the end of next year, so paying back Bicknell would be a big hit. (Wichita Eagle)
  • Illinois Budget Negotiations Float Details: A proposal by a group of legislators would raise the income tax from 3.75 percent to 4.75 percent, expand the sales tax to some services, and cut spending. A separate working group is looking at longer-term reforms like pension and workers compensation reform. (Chicago Sun-Times)
  • West Virginia Governor Calls for Tax Increases: Gov. Tomblin (D) is pitching raising the sales tax by 1 percentage point, raising the cigarette tax from 55 cents a pack to $1 a pack, and imposing sales tax on telecommunications services. (Charleston Gazette-Mail)
  • Oklahoma Advances Revenue Increases: The proposal on Gov. Fallin (R)’s desk eliminates tax rebates for oil producers, and other proposals to remove itemized income tax deductions and charge more for license plates may be coming. (Associated Press)
  • D.C. Proceeding with Next Stage of Tax Reform Package: Despite pressure to redirect revenue increases to additional spending, the D.C. Council will likely approve increases in the standard deduction and personal exemption for all taxpayers and a reduction in business taxes as part of a $13.4 billion budget. The tax cuts, originally approved as part of a reform package in 2014, are triggered when revenue growth exceeds projections. (Washington Post)
  • D.C. Area Regional Tax for Metro Being Developed: As D.C. struggles with the woes of its Metro rail and bus system, politicians are beginning to discuss a regional tax to replace a patchwork of existing taxes and appropriations that vary by jurisdiction. WMATA, the Washington Metropolitan Area Transit Authority, is a compact between Maryland, Virginia, and the District of Columbia. (WTOP)
  • Arlington County (VA) Raises Hotel Tax: One of those jurisdictions, Arlington County in northern Virginia, is raising the hotel tax from 7 percent to 7.25 percent. It will raise $1.25 million to be used for travel promotion. (NBC Washington)
  • Japan Not Postponing Sales Tax Increase, Maybe: Japanese markets were up on rumors that Prime Minister Shinzo Abe was postponing the planned increase in sales tax from 8 percent to 10 percent next April. Shinzo’s cabinet secretary said the rumor was groundless. (Bloomberg / Fiscal Times)

The U.S. Senate Finance Committee will be holding a hearing Tuesday at 10:00 AM in 215 Dirksen to evaluate integrating the corporate and individual tax systems. And Thursday morning, ITIF will be hosting a panel on the proposed innovation box.

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