CTJ's Tax Justice Digest, April 28, 2006Welcome to CTJ's Tax Justice Digest, our regular survey of new and interesting trends in state and federal tax policy. Click here to browse through archived editions of the Digest. |
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The rising cost of gas has fueled a fierce debate on how to lessen the impact of gas prices on consumers. As gas prices near $3.00 a gallon, Michigan lawmakers are looking into ways to apply the 6% gasoline sales tax only on the first $1.95 per gallon of gas. Pennsylvania policymakers are considering a proposal to suspend the state's 31 cent gas tax this summer. Windfall profits taxes are back in the news. Earlier this week, Pennsylvania Governor Ed Rendell called on President Bush to tax the windfall profits of oil companies. Pennsylvania Senator Arlen Specter made a similar plea on Sunday. The Revenue and Taxation Committee in California's State Assembly voted 4-3 to approve a 2 percent tax on oil company profits of more than $10 million. Both ideas are likely to resurface throughout the summer.
Estate tax repeal is back in the news. A new report from United for a Fair Economy and Public Citizen reveals shocking details about who is bankrolling estate tax repeal lobbying efforts. The report includes CTJ estimates showing that 18 families who have contributed millions to these efforts could save as much as $71.6 billion from estate tax repeal. For a look at this eye-opening report click here.
South Carolina lawmakers are taking a breather from their months-long effort to cut property taxes. The most-talked-about proposal, a property-tax-for-sales-tax swap, is drawing complaints from businesses as well as low-income advocates. But as the debate collapsed last week, some promising ideas emerged. One option would impose a statewide property tax. Another would create a broad "circuit breaker" credit available to low- and middle-income homeowners. Here's a thoughtful editorial from The State, South Carolina's largest newspaper, which proposes that broadening the sales tax may be the "silver bullet" for legislators looking to increase revenue and modernize the tax structure.
Florida's lawmakers have been gradually moving towards repeal of their intangible property tax for several years now. This week the legislature put the final nail in the coffin sending repeal legislation to the Governor, which the Governor has promised to sign. In the meantime, the legislature appears to have given up on efforts to reform Florida's poorly targeted property tax caps.
In a special legislative session, Texas lawmakers are looking for ways of reforming the state's unconstitutional school property tax. The House has passed a bill that would cut these taxes by a third, and make up the money with a combination of a 1% gross receipts tax on businesses, a cigarette tax, and the state's temporary budget surplus. An analysis from the Center on Public Policy Priorities describes the flaws in this plan.
In the last days of their legislative session, lawmakers in Hawaii are discussing meaningful tax relief for working families. Three proposals are currently being considered: an increase in the standard deduction, widening the income tax brackets, and creating an Earned Income Tax Credit (EITC). An EITC would be the most targeted and cost effective means of providing assistance to the working families that need it the most. To read more about the benefits of the EITC click here.
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