More Recent Tax Foundation News: Page 1
Senator Obama's tax plan is a dramatic redistribution of the nation's tax burden, according to a new Tax Foundation analysis.
In Tax Foundation Fiscal Fact, No. 132, Tax Foundation president Scott Hodge uses revenue estimates from the Tax Policy Center to show that Obama's plan would greatly accelerate the decades-long trend toward a federal government that depends for tax revenue almost exclusively on a few high-income people. This contrasts starkly with the McCain plan, according to Hodge, which would give every taxpayer a cut and leave the current tax burden distribution approximately where it is.
"Under the Obama plan for 2009," explains Hodge, "more than $131 billion would be redistributed from the top 1 percent of taxpayers to all other taxpayers."
Read the new study, "Hard Numbers on Obama's Redistribution Plan," here. Click here for more on the candidates' tax plans.
In testimony submitted today to the Commercial and Administrative Law Subcommittee of the U.S. House Judiciary Committee, Tax Foundation Tax Counsel Joseph Henchman outlined the importance of a consistent and predictable presence-based standard for business taxation.
"Today, with new technologies, even the smallest businesses can sell their products and services in all fifty states through the Internet and through the mail," Henchman wrote in his testimony. "If such sales can now expose these businesses to tax compliance and liability risks in states where they merely have customers, they will be less likely to expand their reach into those states."
The Tax Foundation testimony made two primary points: (1) the physical presence standard limits destructive and likely unconstitutional state efforts to export tax burdens, efforts that stifle interstate commerce and harm economic growth; and (2) a uniform physical presence standard would decrease transaction costs for interstate commerce, especially small businesses using mail and the Internet.
The hearing was held to consider H.R. 5267, the Business Activity Tax Simplification Act (BATSA), which clarifies that states may only tax businesses that have property or employees in the state. While the Tax Foundation takes no position on the bill, it has catalogued the trend of states shifting tax burdens to out-of-state commerce, which makes democratic accountability difficult and harms interstate commerce.
"The Internet has seen an increased amount of commerce, but some seem to view it as a golden goose that can be squeezed without adverse effects on economic growth," Henchman wrote. "A uniform physical presence standard would restrain these efforts, maintain a level playing field for all types of businesses, and reduce costs and burdens to interstate commerce."
Click here to read the testimony. Read more on business taxes or tax law.
A new Tax Foundation Fiscal Fact examines a package of proposed subsidies and special tax breaks for favored industries, currently under consideration in the Arizona state legislature. Typically, with packages of lobbyist-driven handouts such as these, the actual value to state residents is inversely proportional to the sponsors' soaring language regarding their benefits. So when Arizonans are told that the package's effects will be "bringing in new manufacturing jobs, revitalizing urban areas, attracting tourists, maintaining or expanding the Cactus League and stabilizing the construction market," they should check to make sure they are still in possession of their wallets.
The Arizona State House's press release announcing the proposals grandly reports that "no current general fund money would be used for the projects." Technically, that's true. However, the difference between the government (1) collecting a tax and then cutting a check to a favored business, or (2) exempting that favored business from a portion of its tax liability, is a difference in accounting only. These programs will impose significant costs on Arizona's general fund in the form of tax revenues foregone. In many cases, the special tax benefits will go to businesses or projects that would have existed with or without the new laws, representing a true loss of otherwise-collected revenue.
Read the Tax Foundation Fiscal Fact. Learn more about taxes in Arizona.
As Senator Obama abandons public financing, a new Tax Foundation analysis shows that most American taxpayers were never enthusiastic enough to contribute to the program on their tax returns. Analyst Mark Robyn explains how the Presidential Election Campaign Fund works and explores the low taxpayer participation rate.
On the 1040 form, all tax filers can check a box marked Presidential Election Campaign if they want $3 of their tax payments to go into this fund ($6 for couples). Taxpayers are assured that they are not paying extra if they check the box. Only about 12 percent of taxpayers nationwide have checked the box in recent years. Robyn calls the assurance that the $3 is free to the taxpayer "dubious" and suggests four reasons for the lackluster participation.
Read the Tax Foundation Fiscal Fact. Read the press release. Click here for more on the 2008 election.
A new Tax Foundation Fiscal Fact analyzes the recommendations in a report recently issued by the New York State Commission on Property Tax Relief. The bipartisan panel was established last year by Governor Eliot Spitzer to propose solutions to rein in ballooning property taxes while maintaining the state's commitment to public education.
The proposals appear to improve an existing property tax rebate program that rewards school districts for raising taxes; provide a meaningful cap on property tax levies; and increase transparency. Additionally, the tax-limiting proposals are joined with cost-control measures, so that property tax savings can actually accrue to New Yorkers instead of being shifted to increases in other taxes.
Read the Tax Foundation Fiscal Fact. Read the commission's recommendations (PDF). Learn more about property taxes and taxes in New York State.
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