Archive for the ‘State & Local Issues’ Category

Do Sales Tax Holidays Ever Make Sense?

Politicians love sales tax holidays as good campaign fodder. Retailers celebrate them with gaudy signs announcing tax-free shopping, and consumers line up to take advantage of the deals. But economists and policy analysts across the ideological spectrum condemn them as poorly targeted tax policy that produces little economic benefit. Is there any fiscal justification for […]

State Taxes and the April Surprise

In recent months, several governors have complained about the April, 2014, surprise in state tax revenues. They say they were shocked when personal income tax payments fell far below expectations. They shouldn’t have been. What happened? In part, in an effort to beat an upcoming increase in capital gains taxes, investors accelerated realizations into tax […]

What’s The Matter With Kansas And Its Tax Cuts? It Can’t Do Math

Kansas Governor Sam Brownback and his state legislature have embarked on a wonderful natural experiment. Once again we are testing the question: Can tax cuts pay for themselves? The answer– yet again– is a resounding no. We’ve tried this experiment time and again. And tax cut proponents such as economist Art Laffer continue to insist they […]

Close But No Cigar: The Politics of Class, Race, and Taxes

This week, the District of Columbia City Council approved a major tax reform bill. And, as it happens, some important—but unspoken– issues of race and class are underlying key changes to the revenue code. Earlier this year, the DC Tax Revision Commission proposed a broad rewrite of the city’s tax code, including two modest but […]

U.S. Taxes Have Changed A Lot Since 1929

U.S. taxes today bear little resemblance to the taxes collected before World War II. Income and payroll taxes have replaced tariffs and excise taxes at the federal level while property taxes have become less important for state and local governments. And while the feds collected just one-third of all revenue before the war, they now […]

Making State and Local Taxes “Friendly” to Small Businesses

Small business owners are more concerned with the complexity of state and local tax laws than with the amount of tax they pay, according to a recent survey conducted by Thumbtack.com in partnership with the Ewing Marion Kaufman Foundation. Aside from economic conditions, small business owners’ perception of the ease of compliance with licensing, regulatory, […]

Ohio Lawmakers Turn A Surprise Surplus Into A Huge Tax Cut

What does a state do when faced with a 14 percent decline in income tax collections, much of it due to past tax cuts? Why, it cuts taxes even more—especially when that fall in revenues is lower than expected and—combined with lower spending — results in a surprising $700 million budget surplus. That seems to […]

Are Domestic Partnerships A Way For Heterosexual Couples To Avoid The Marriage Tax Penalty?

In their zeal to provide a legal alternative to banned marriage for same-sex couples, some states may have created a new tax shelter for heterosexual couples. By choosing domestic partnership or civil union over marriage, opposite-sex couples are able to avoid paying a federal income tax marriage penalty, just as same-sex couples can. Over the […]

Retailers That Collect Online Sales Tax Lose Business

Online retailers have argued for years that they’ll lose business if they have to collect sales taxes on their online transactions. A new study by three researchers at Ohio State finds they are right. Paradoxically, the study may increase support by some online sellers for federal legislation to standardize collections across states. The study, by […]

An EPA-Sanctioned State-Based Carbon Tax Could Reduce Emissions and Improve State Finances

The U.S. Environmental Protection Agency (EPA) is developing a proposed rule due out in June that could allow states to use carbon excise taxes or fees to limit the one-third of U.S. greenhouse gas emissions that come from power plants. The tax approach, one of several options EPA could offer states, could provide an important […]