CTJ's Tax Justice Digest, May 26, 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. |
|
After the Memorial Day recess the US Senate is expected to vote on further cuts in the estate tax. For a stark reminder of why the estate tax was enacted check out this CTJ release describing the growing inequality of wealth in America. For more information on estate tax facts versus fiction, read this report from the Center on Budget and Policy Priorities. Even as Congress debates whether estate tax repeal is affordable, there's more bad news for the federal budget: the Treasury Department says it will refund $15 billion to consumers for collecting certain taxes on long-distance phone calls.
In the wake of reports from Oregon and Georgia estimating the taxes paid by undocumented immigrants, the Republican leadership in Congress is pushing to deny the federal Earned Income Tax Credit (EITC) to undocumented workers-- even though these workers typically pay the same regressive payroll taxes that are most burdensome for other workers. The Center on Budget and Policy Priorities makes a powerful statement against this move.
Ohio lawmakers are at it again: on the heels of a US Supreme Court ruling that Ohio taxpayers did not have a legal right to contest the constitutionality of $300 million in tax incentives given by the state the DaimlerChrysler corporation, more giveaways are on the horizon. Some state senators are trying to pass a new tax giveaway which would provide some manufacturers with a 100 percent tax credit on their electric bill. Meanwhile, there is growing evidence that the corporate tax breaks already in place aren't working out well for the state. Here's an article detailing how the Sara Lee corporation hasn't produced enough jobs to qualify for the state's job creation tax credit, but accountability and enforcement pose a real problem.
The property tax reform debate is heating up again in Pennsylvania, where Republican candidate (and former Pittsburgh Steeler) Lynn Swann has a novel idea for property tax cuts. Swann wants to freeze taxable home values for every Pennsylvanian at its current value-- until they sell their home, at which point the taxable value catches up to its actual market value. This approach to property tax cuts was one of the more lamented features of California's Proposition 13, and has caused much consternation in Florida as well. There are some indications that the Swann plan would violate the state constitution's uniformity clause. For more on Florida's experiment with this approach to property tax reform, check out the Talking Taxes weblog here.
Illinois Governor Rod Blagojevich has announced a plan to sell or lease the state's lottery to a private organization in order to raise revenues for increased school funding. Governor Blagojevich anticipates his plan will produce a one time windfall of $10 billion. $10 billion is a lot of money for public education, however, the Governor's plan is a short term fix to a long-term problem. A one time windfall will not guarantee adequate revenues in the long-term.
In Oklahoma, Republican and Democratic leaders are feuding over how to dispose of the state's budget surplus, with Republicans pushing for cuts in the top income tax rate and Democrats pushing for an increase in the stand deduction. An analysis by Oklahoma's Community Action Project shows that the standard deduction would be a much better deal for most Oklahomans.
A Maine Green Party gubernatorial candidate, Pat LaMarche, has proposed a seasonal sales tax hike. LaMarche's idea is to increase the sales tax during the summer so that more of the overall tax burden is paid by tourists. Asked about the impact on year-round Maine residents, LaMarche says "[t]he locals will know when to buy their cars". Here's hoping Maine residents have the financial flexibility LaMarche thinks they do.
Missed a past issue of the Digest? Click here to read past versions.
To report broken links or share comments, email us