The Senate is close to passing a bill that would let states require online and catalogue sellers to collect sales taxes on the products they sell. Congress has been struggling with this issue for decades, yet few disputes have generated as much confusion and misinformation as this one. To help separate myth from reality, here [...]

Until the Great Recession, state and local governments played a remarkably constant role through down business cycles. For four decades, when the economy turned sour, state and local governments boosted their spending—mitigating the depths of recessions and adding to growth when the economy revived. (Of course, this growth was partially offset by the negative effect [...]

Senate Majority Leader Harry Reid (D-NV) plans to bring the Marketplace Fairness Act of 2013 to the floor today for a preliminary vote.  The measure would give states authority to require on-line sellers to collect sales tax on the products they sell to consumers within their jurisdictions. This is big news.  Two years ago, Senate [...]

Just months ago, to the joy of conservatives and the consternation of liberals, several Republican governors proposed major tax reform plans. At least three–Bobby Jindal of Louisiana, Dave Heineman of Nebraska, and Pat McCrory of North Carolina– vowed to completely repeal their state corporate and individual income taxes. But by Tax Day, two of those [...]

A few years ago, it was fashionable to compare California, Illinois, or whatever U.S. state was struggling financially to the troubled island nation of Greece.  Now, with Stockton, California the largest U.S. municipality to enter bankruptcy, it may be tempting to make another Mediterranean comparison – this time to the troubled island nation of Cyprus. [...]

Automatic enrollment is slowly gaining steam as the choice strategy to encourage retirement saving.  A bold plan in California would eventually make the practice widespread and could revolutionize the state’s saving landscape. Last September, the California legislature approved a framework for automatically enrolling private-sector workers in a retirement savings plan.  Employers with more than five [...]

States trying to decide whether to expand their Medicaid programs to cover more low-income uninsured might want to take a look at the fate of a more obscure federal program—cash subsidies to state and local governments that sell certain kinds of bonds, especially Build America  Bonds. If they do, they’ll see what happens to a [...]

How many tax bills introduced have bipartisan support in today’s hyper-partisan Congress? Not very many but last week identical bills were introduced in the House and Senate that enjoyed rare bipartisan support. Twenty senators and 37 members of the House from both parties signed on to the Marketplace Fairness Act of 2013 (MFA)—legislation that would [...]

With state finances gradually improving, some Republican governors are turning their attention to fundamental tax reform.  Louisiana Governor Bobby Jindal has proposed replacing his state’s personal and corporate income taxes with higher sales taxes.  Nebraska’s Dave Heineman and North Carolina’s Pat McCrory would do something similar, broadening the sales tax base and perhaps including some [...]

Economic growth estimates released yesterday were not good news: the economy contracted in the fourth quarter for the first time since 2009, albeit by just 0.1 percent. Commentators have mostly attributed the mild contraction to a steep drop in federal defense spending and reduced inventories—each factor cut the quarter’s growth by about 1.25 percent on [...]