CTJ's Tax Justice Digest, May 12, 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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On Tuesday, a Congressional conference committee agreed on a tax plan that will reduce federal taxes by $70 billion over the next five years. The plan includes a raft of new giveaways for wealthy Americans and corporations, but offers only a temporary fix for what has become a permanent problem: the expansion of the individual Alternative Minimum Tax (AMT). Good media analyses of the bill are here and here. David Cay Johnston weighs in here. And CTJ's analysis of the latest "$70 Billion Tax Shift" can be found here.
Wondering how your elected officials cast their votes? The Talking Taxes weblog has details on how each House and Senate member voted.
Before the ink even dried on the reconciliation agreement, congressional tax writers signaled their intention to move straight into a second package of mostly-corporate tax cuts, including a temporary extension of the controversial Research and Experimentation credit. A CTJ analysis argues that extending the credit amounts to "throwing good money after bad".
Even as Senate Republicans threaten a vote on permanent estate tax repeal, a new report from a Federal Reserve Bank (FRB) researcher reminds us all why the estate tax was enacted in the first place. The FRB report shows that the wealthiest 1 percent of Americans now own more than a third of the wealth nationwide-- more than the poorest 90 percent of Americans put together. The report also shows that this trend is getting worse. CTJ explains the numbers here. The FRB report is here. Meanwhile two states, Arizona and Kansas have passed legislation repealing their estate taxes. To learn more about what lawmakers in your state are doing to preserve this important tax fairness tool contact United for a Fair Economy.
As the federal tax cut parade continues, new concerns are arising about the economic impact of some already-enacted tax cuts. When Congress passed a 2004 corporate cut allowing U.S. companies to repatriate their foreign income at a special low tax rate, most observers saw this as a counterproductive and opaque tax giveaway to big business. A new report from the Congressional Research Service (CRS) confirms this critique: The CRS casts doubts on claims that the repatriation tax break will have any long-term impact on U.S. investment by multinational firms. An earlier edition of the CRS report is available here.
In a setback for good-government advocates, a state court judge has thrown out a lawsuit challenging the legality of the $300 million-plus incentives package that lured computer maker Dell Inc. to build a plant in North Carolina. For more on the good, the bad and the ugly in the economic development world, check out the inaugural edition of Good Jobs First's "Subsidies in the News" newsletter.
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