Tax Foundation in Idaho and Arkansas, and the Best of the Blogosphere in the States

December 4, 2008

Yesterday, Tax Foundation President Scott Hodge spoke to the Idaho Taxpayers Conference in Boise. The Idaho Statesman reports:

State and local taxes account for 10.1 percent of state income in Idaho, ranking 13th highest in the nation, Hodge said. Wyoming ranks 48th, Montana 40th, Washington 35th and Utah 22nd.

“You stand out in this high-tax state in the middle of a low-tax oasis,” he said.

Hodge suggested eliminating the corporate income tax, which he said is the most anti-growth of all taxes.

“It’s going to be really difficult for Idaho to gain a comparative advantage to any of your neighbors without eliminating one of your major taxes,” he said. “Only permanent tax cuts will change people’s behavior long term.”

Staff Economist Josh Barro was in Little Rock, Arkansas to speak at a joint meeting of the legislature’s Committee on Economic and Tax policy and the Committee on Revenue and Taxation. Both the Arkansas Democrat-Gazette and the Arkansas News Bureau featured Josh’s testimony. Excerpts from the Bureau:

“Sales taxes have been falling off, especially in states with relatively narrow sales tax bases,” Barro told lawmakers. “When a sales tax base includes groceries and other necessity items it’s relatively stable, but a number of states, especially in the northeast, have continually narrowed their sales tax bases to a point where essentially they’re depending on the sales of automobiles, electronics and furniture.”

Rather than reducing the grocery tax, Barro suggested offering tax credits to low-income households.

“A credit provides more targeted relief to low-income taxpayers than a grocery tax cut,” he said.

Barro also said studies have found that tax holidays for back-to-school shoppers do not promote economic activity.

As for the blogosphere, there’s lots of Tax Foundation state data that’s being used:

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