Lunch Links: Viard-Toder tax plan; CA may tax e-cigarettes; Trump’s taxes
June 20, 2016
Today is June 20, the anniversary of West Virginia statehood in the midst of the Civil War. Because the Constitution requires that a state consent to any division, the Unionist government of Virginia in exile approved the decision. Two additional counties were annexed to West Virginia shortly thereafter, and efforts by Virginia, after the war, to repeal the act of cession were rebuffed by the U.S. Supreme Court.
A few notable tax items for today:
Joint AEI/TPC Corporate Tax Reform Proposal: Alan Viard of the American Enterprise Institute and Eric Toder of the Tax Policy Center have outlined a plan for corporate tax reform which would reduce rates while directly taxing shareholders on investment income at ordinary income rates, treating debt and equity financing equally. (Forbes / American Enterprise Institute)
North Dakota Revenues Hit by Falling Oil Prices: Plunging energy prices continue to take a toll on states which rely heavily on severance tax revenue. Faced with a substantial shortfall even after cuts to the state’s record $14.4 billion biennial budget, North Dakota is now preparing to empty its rainy day fund. There were 187 active oil rigs in North Dakota two years ago; the number is now 28. (Associated Press)
California Ballot Initiative Would Tax E-Cigarettes: A California ballot initiative would raise the state’s cigarette tax by $2 per pack and impose excise taxes on e-cigarettes for the first time. According to a Legislative Analyst’s Office report, the State Board of Equalization would have to make a determination on how to apply the tax to e-cigarettes, but the tax could run as high as $5.37 per e-cigarette. (State Tax Notes)
IRS Changing Audit Notification Procedure: The IRS will now notify taxpayers of an audit by mail, and not by phone as has been standard practice. The change in policy has been attributed to growing concerns about identity theft. (Bloomberg)
Trump’s Tax Liability: The Washington Post, the Daily Beast, and now POLITICO have identified five years in which it appears that Donald Trump did not incur federal income tax liability. This is, of course, possible even if one accepts that Trump had substantial earnings overall, since he may have posted losses in specific years despite gains overall. (Politico Morning Tax)
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