Lunch Links: What the 1% Pays; Pennsylvania Approves $1.3 Billion Tax Increase; Oklahoma Considers Raising Sales Tax
July 14, 2016
Today is July 14, the date in 1832 when the Tariff of 1832 was passed, reducing the extraordinary rates from the earlier “Tariff of Abominations” (of 1828). Rates were lowered somewhat but were still too high for the South, continuing the Nullification Crisis. It’s also Bastille Day, the date the French began to overthrow their financially insolvent absolute monarchy.
Here are some interesting links I came across:
- IRS Hearing Today on International Tax Regulations: Tax Foundation staff will be there today taking notes, so stay tuned.
- Are the Rich Paying Their Fair Share Yet?: My colleagues Scott Greenberg and John Olson find the top 1 percent are paying 34 percent of their income in federal taxes, compared to the middle 20 percent who pay 12.8 percent of their income in federal taxes. The number on the top 1 percent as spiked recently, as the economy improved. Scott and John also note that Donald Trump wants to cut the top 1 percent effective tax rate down to 20 percent, while Bernie Sanders wants to raise it to 46 percent. (Tax Foundation)
- Pennsylvania Approves Taxes for Budget: The total tax increase is $1.3 billion. The vote in the House was 116 to 75 and in the Senate was 28 to 22. The tax on cigarettes is raised by 62 percent to $2.60 per pack, taxes electronic cigarettes at 40 percent of their wholesale price, and the state’s sales tax will be applied to digital downloads. Retailers will see less compensation for collecting the sales tax, bank shares taxes are hiked from 0.89 percent to 0.95 percent, business purchases of timber inputs will be exempt from sales tax, income tax will now be collected on lottery winnings, and there will be a tax amnesty for past-due payments. Overall income and sales tax rates don’t change. (Associated Press / Penn Live)
- Scranton Businesses Protest Business Privilege and Mercantile Tax: Businesses in Scranton, PA must pay the city and school district a $1.68 tax for every $1,000 in gross receipts. Gross receipts taxes are bad enough but this one in particular seems to be pushing business activity outside of the city to areas that don’t impose the tax. Dozens of Scranton businesses have signed a petition to boycott payment of the tax, and both recent legislation and the state budget just approved permit the city of Scranton and the school district to replace the tax with something else. (SaveScranton.com / Pocono Record / WNEP / Scranton Times-Tribune)
- Denver Mayor Proposes Tax for Affordable Housing: Denver Mayor Michael Hancock says a $150 million property tax increase is needed to construct or preserve 6,000 income-restricted rental units and houses. His proposed tax is inequitable: 60 cents per square foot for single-family homes, but $1.70 per square foot for retail and commercial. (Denver Post)
- Oklahoma to Decide Question 779 Raising Sales Tax: My colleague Erica Wilt reviews the proposal.