Daily Deduction

from the Tax Policy Center

Relief, Credits, Cuts, and Roads

By :: May 22nd, 2014

Maybe we all can just get along. At least, that’s what other Swiss banks might be thinking, now that Credit Suisse paid penalties (the tune of $2.6 billion) to end its longstanding dispute with the US and New York for helping Americans dodge US taxes. Swiss Finance Minister Eveline Widmer-Schlumpf said the resolution created “breathing space” for other Swiss banks in similar disputes with the US.

There’s tax relief in the Minnesota. Minnesota just provided half a billion dollars’ worth of tax relief. The second round signed into law this week by Democratic Governor Mark Dayton amounted to $103 million, bringing the total to $550 million. Average tax refunds will climb for middle-class homeowners and renters. It accompanies $1.7 billion in new construction projects for the state.

There’s some in Ohio, too. The state’s Senate Republicans are speeding up action on an income tax reduction plan. Ohio is flush with cash right now: The Columbus Dispatch reports that “through April, state revenue was $310 million above estimates, while spending was $848 million below estimates."

And there’s this wicked awesome tax credit for film crews: In Massachusetts, filmmakers who spend more than $50,000 in the state get a 25 percent tax credit to offset costs of actors, set building, and other expenses. The Los Angeles Times reports that film and TV productions spent $313 million in 2012, and Massachusetts paid out an estimated $78.2 million in film tax credits. It’s great for the makers of films like Oscar-nominated American Hustle, but does little for the state’s overall economy.

But times are tough for Governor Chris Christie… and public pensioners. New Jersey suffers from a 13-month shortage of $2.7 billion, according to the legislature’s budget and finance officer. The governor, a maybe-2016 presidential candidate, does not plan to raise taxes to cover the gap. Instead, he’s cutting state pension payments. This year, the payment will be $696 million, instead of his proposed $1.58 billion. And in fiscal year 2015, it will be $681 million, instead of his proposed $2.25 billion.

So “fix the d— roads” already! That’s apparently a quote: In Michigan, Republican state Senate Majority Leader Randy Richardville will propose significant phased-in fuel tax increases to address, for starters, debilitating pot holes throughout the state’s roads. Democratic Senator Claire McCaskill of Missouri backs a sales tax to fund roads and transportation projects. In Raleigh, North Carolina, the city manager Ruffin Hall proposed a 1-cent property tax increase to raise about $5.1 million for city street resurfacing. And in South Dakota, the up-for-re-election Republican Governor Dennis Daugaard reversed course and said he might support a gasoline tax hike to fund roads and bridges.

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  1. Michael Bindner  ::  1:51 pm on May 22nd, 2014:

    Sadly, the Finance Minister’s job is to make sure that his banks have a competitive advantage and pay as little a possible in fees for it. More proof we should annex Europe, which will also help us fund our military.

    Whether the Minnesota tax cuts are a good idea depend on whether they came about from previous tax increases or from revenue increases that came with the one time bump from investors cashing out before paying the higher capital gains tax rate in 2013. The same applies to Ohio.

    Massachusetts’ film crew cut is entirely unnecessary because people are going to film in Boston regardless. I suspect this reflects campaign contributions more than budgetary realities.

    If there ever was an object lesson on why cutting taxes can be idiotic, there is New Jersey – a lesson for Minnesota and Ohio that they obviously ignored.

    State and local taxes for roads are no surprise because everyone will ignore Senator McCaskill’s gas tax bill. That means that some states will have good roads while others have falling bridges.

  2. Ralph H  ::  2:08 pm on May 22nd, 2014:

    Christie is doing what the previous 3 governors (2 Dems and a RINO) did, use gimmicks to “balance” the budget, often by underfunding pensions. Other gimmicks included selling bonds against the tobacco settlement. NJ’s problem is too much promises to state workers and to large city poor school districts. Middle and upper middle class families pay for this in VERY high property, sales, and income taxes. The state also has overregulated business and the environment. As a result we attract little new business and people leave as soon as they retire to a lower cost of living and reasonable taxes. I will soon be joining them.

  3. 2014 TAX DAY CALIFORNIA Tips  ::  10:19 am on May 24th, 2014:

    […] Relief, Credits, Cuts, and Roads – TaxVox – Tax Policy Center […]

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    […] Relief, Credits, Cuts, and Roads – TaxVox – Tax Policy Center […]