CTJ's Tax Justice Digest, June 26, 2006

NEW Report from Citizens for Tax Justice:
The True Cost of Bush's Tax Breaks and Spending Policies

Citizens for Tax Justice today released new facts sheets showing the overall impact of President Bush's tax and spending policies in each state from 2001 through 2006. Because the President's tax breaks and spending initiatives are not paid for, these policies result in a debt burden that will be greater than the tax breaks. The only people who truly gain are the wealthiest 1 percent of Americans. Their tax breaks are so huge that they outweigh the added debt burden resulting from the President's policies.

Draconian Budget Process Rules Proposed To Push Service Cuts and Pay for Bush Tax Breaks

Despite the fact that tax breaks enacted since 2001 are responsible for almost half of the U.S. federal budget deficit, President Bush and Republican leaders in Congress claim that they need new budget rules that will encourage deep cuts in federal programs — but mandate no changes in tax policy — in order to get deficits under control. A new CTJ brief explains some of the proposals, including the line-item veto just approved in the House of Representatives and the more sweeping proposals under consideration in the Senate.

Tax Shelters in the Guise of Savings Incentives

Provisions raising the contribution limits for Individual Retirement Accounts (IRAs) and 401(k) plans may be made permanent under the pension bill that House and Senate conferees have been trying to work out for months. (They are currently hung up on just how much companies should do to ensure their pension funds are adequate.) Meanwhile, the Congressional Research Service has just reported what we have long known to be true: these types of tax incentives do little to encourage new savings but rather just provide new tax shelters which benefit wealthier families who are in larger income tax brackets.

From Catastrophe to... Surplus?

Despite having cut nearly $900 million in spending programs, the New York Times reports this week that contrary to initial predictions Louisiana revenues are quite high. These increased revenues are largely due to increased gambling, the rising cost of oil, and growing sales tax revenues. Given these unexpected revenues one priority for legislators should be providing property tax relief to renters.

Tax and Budget Reform in the States

In South Dakota, property tax reform became a hot topic this week when schools brought a suit against the state over education funding. In New Hampshire, where the role of property taxes has been debated for a while now, the State Supreme Court is hearing a case to determine and define the cost of adequate education. The districts bringing the suit argue that statewide property tax is geared to give wealthy towns a break compared to poor towns.

Meanwhile, another state looks to passively let its problem slide by. In response to an executive order by Florida Governor Jeb Bush, a 15-member panel will study property tax reform. Some speculate that the panel was formed for purely political reasons and that during an election year a study of this magnitude means that legislators can put off making politically difficult decisions.

Bolder Steps Needed in Utah

Our own Casey Cabalquinto has an op-ed run in Utah's Salt Lake Tribune calling for more transparency in tax policy decision-making. Casey argues that lawmakers should build on recently passed tax transparency legislation by implementing regular incidence analysis, tax expenditure reporting and corporate tax disclosure.

Proof-Reader Needed in Hawaii

Hawaiian lawmakers need to be more careful when it comes to crafting their tax legislation. Lawmakers sent a bill to Governor Lingle that increases the cigarette tax with a provision meant to provide money for a cancer research fund. Instead of the legislation mandating for one percent of the increase to go towards the fund, it actually states one cent. Needless to say, the Governor is thinking about vetoing the bill. Oops.

Missed a past issue of the Digest? Click here to read past versions.

To report broken links or share comments, email us

CTJ Home Page