Daily Deduction

from the Tax Policy Center

Moving, Marijuana and More Money

By :: May 12th, 2014

Relocating: It’s not about the taxes. A new study from the Center on Budget and Policy Priorities finds that few people migrate from one state to another to save on taxes. While some elected officials  lower state income taxes to attract high-earning residents, CBPP concludes that  low and moderate-income households are more likely to move to no-income-tax states than their higher-income counterparts. Climate and jobs are much bigger drivers than taxes. And lower housing costs, not taxes, save folks the most money when they do move.

Senate may tackle the research credit this week. On Friday, the House left town for a week after passing a permanent extension of the research credit. But the Senate will be in business and may take up its version, which would extend the popular tax break only through 2015. We may not know how this showdown ends until after the November congressional elections.

Taxed and confused. Can Washington State levy a sales tax on medical marijuana when its use is illegal under federal law? The US District Court in Seattle will soon decide. A medical marijuana dispensary operator faces federal criminal prosecution for marijuana distribution, and also owes Washington State about $62,000 in sales taxes. His attorney says the operator can’t pay the sales tax without criminally implicating himself for dope distribution.

Even tax-writing Congressmen get the tax blues. Republican Rep. Todd Young of Indiana claimed a property tax deduction for a home he rented and didn’t live in, saving himself about $5,000. The homestead deduction had been in play when he lived in the property, but he neglected to complete the necessary paperwork to end his deduction when he moved out. He’s corrected his mistake and paid his fees, just like any other taxpayer.

Voters in Indiana want to pay more for schools. In ballot measures last week, they approved 9 out of 10  local tax increases to meet the needs of public schools, such as art and music education and bus services. Property taxes had been capped since 2009, limited to 1 percent on homes, 2 percent on farms and 3 percent on businesses. One voter remarked: "There's something systematically wrong with how school districts are funded when schools keep having to go back to taxpayers for money.”

House IRS investigations can’t compete with Benghazi. After a year of investigating the IRS treatment of tax-exempt organizations, House Republicans are now diverting their investigatory energies back to the 2012 attacks in Benghazi. Those attacks occurred on the watch of former Secretary of State Hillary Clinton, a possible 2016 presidential candidate. The IRS investigation has not been as simple as House Republicans had expected. Presidential politics trump most everything.

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5Comments

  1. TAX FREE DAYS 2014 2014  ::  7:17 pm on May 12th, 2014:

    […] Blog Archive » Moving, Marijuana and More Money – TaxVox – Tax … […]

  2. Michael Bindner  ::  4:27 am on May 13th, 2014:

    Taxes would only be a major factor on moving if they were much higher. Sadly, they are still much too low, which gives an incentive to cut wages and make people look for decent jobs by moving. Taking up the research tax break in the Senate may be progress or it may be rapid progress. It depends on who is writing checks. The question of tax avoidance to not admit criminal activity is not a winning strategy and has not been since Capone was convicted. The fact that it is a legal state activity, which Obama said would not be prosecuted unless dispensaries go to far, means he may be doing something wrong (within the bounds of the law). Of course, he still must be convicted by a jury of his peers and they may nullify any federal intrusion. Still, his lawyer should know better. Property taxes should not be funding Indiana schools. Some kind of consumption or employment tax should (consumption also taxes profit, so it is not :”regressive” in all uses). Back to the Hill, Beghazi is back, leaving investingating the IRS in the dust. I miss Tom Davis. His successor is a partisan hack.

  3. TAX FREE DAYS 2014 News  ::  4:22 pm on May 13th, 2014:

    […] Moving, Marijuana and More Money – TaxVox – Tax Policy Center […]

  4. HOW MANY DAYS UNTIL TAX DAY 2014 News  ::  4:18 am on May 15th, 2014:

    […] Moving, Marijuana and More Money – TaxVox – Tax Policy Center […]

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