Topic: State & Local Issues

Taxes penalize hockey teams? That's a bad call, eh?

By :: October 9th, 2015

Americans for Tax Reform (ATR) and the Canadian Taxpayers Federation (CTF) recently published a report, “Major Penalty for High Taxes,” that claims taxes drive free agency in the National Hockey League (NHL). I’m a sports fan and tax geek, but the ATR/CTF report is a case study for stories that mistakenly merge the two topics together. […]

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The Trouble with State Tax Triggers

By :: September 25th, 2015

State policymakers are increasingly using “triggers” to pass big tax cuts while ducking tough decisions on how to pay for them. They are bad tax policy. Naturally, they are incredibly popular. Here’s how a tax trigger works: A state cuts taxes over a period of years. There may be an initial tax cut that takes […]

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States That Cut Taxes Do So At Their Peril

By :: July 29th, 2015

Ever since the 1970s, when Jude Wanniski and Arthur Laffer came up with the ideas that are now referred to as supply-side economics, conservative politicians have been unable to resist the siren song of tax cuts for big earners. In recent years, this enthusiasm has spread to state governments led by conservatives, offering new tests […]

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Puerto Rico: Not Your Father’s Debt Crisis – or Your Greek Uncle’s

By :: July 1st, 2015

In a remarkable statement, Governor Alejandro Garcia Padilla announced this week that Puerto Rico’s debts are “not payable.” Nobody was really surprised. The island can work its way out of this financial mess with a two-pronged strategy: An aggressive short-term effort to raise taxes, cut spending, and improve financial controls combined with a long-run plan […]

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How Would the Kansas Senate Close the State’s Budget Gap? Mostly by Taxing Poor People

By :: June 12th, 2015

Kansas is grappling with a self-inflicted budget crisis. In 2012 and 2013, the state decided to experiment with major income tax cuts and an exemption of most small business and partnership income aimed at boosting the economy. The experiment is not going well to say the least. Now, faced with a serious budget gap and […]

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One Solution to California’s Drought: Tax Water

By :: April 7th, 2015

The idea is straight out of Economics 101: If you want people to do less of something, raise the price. And California desperately needs its residents and businesses to use less water. So rather than trying to curb water use through a complex maze of regulation, why not just raise the price though a new […]

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Bobby Jindal’s Revenue Enhancements

By :: March 23rd, 2015

Politicians looking to “enhance revenue” without raising taxes might want to take a close look at Louisiana, where Governor Bobby Jindal may have found the promised land of conservative tax policy. He’s promoting a plan to raise $526 million without a tax increase. His trick: Turn refundable business credits into non-refundable credits. With a refundable […]

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State Revenue Growth Will Remain Sluggish

By :: February 16th, 2015

State forecasters expect revenue growth to remain sluggish through fiscal year (FY) 2016 according to an Urban Institute analysis of agency reports. In FY17, states project revenue growth will return to its average post-2000 rate but remain significantly below its long term average. These state estimates are not adjusted for inflation. Using CBO’s forecast of […]

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Oklahoma Pulls the Trigger on an Unaffordable Tax Cut

By :: January 5th, 2015

Increasingly, states are tying tax cuts to revenue targets. It sounds reasonable enough: If a state collects more tax than it needs to fund government in a future year, rates automatically go down. But such tax triggers open the door to shameless budget gimmickry. The latest poster child for this is Oklahoma, which enacted a […]

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What Falling Oil Prices Will Mean for State Budgets

By :: November 25th, 2014

Oil prices are dropping…fast. This may be good news for drivers but not so good for a handful of states that use energy tax revenue to help fund their budgets. It may be especially challenging for states that rely on taxes from production of shale oil that uses methods that may be practical only at […]

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