CTJ's Tax Justice Digest, December 21, 2006

CTJ Targets Tax Loopholes for Big Energy Companies

The Democratic leaders who will take charge of the next Congress have indicated their desire to shift money away from tax subsidies for large oil companies and towards the use and development of alternative energy sources. A new paper from Citizens for Tax Justice describes some of the biggest tax loopholes enjoyed by Big Oil and what steps members of Congress have proposed to deal with them. When the price of oil and oil industry profits are at an all-time high, it's hard to imagine why the United States should subsidize Big Oil through the tax code. The incoming Congressional leadership understands this, and we hope the President does as well.

Virginia Governor: Focus on Tax Fairness

Last week, Virginia Governor Tim Kaine unveiled his proposal to increase the state's income tax threshold. This proposal comes three years after former Governor Mark Warner signed into law a massive tax restructuring that was mostly geared towards adequacy. The current Governor’s proposal builds on past tax reform efforts but is also intended to make the tax structure more fair. He's proposing to increase the personal income tax filing threshold from $7,000 to $12,000 for singles and from $12,000 to $24,000 for couples. Governor Kaine's proposal is a small step towards tax fairness but doesn't do much to offset the regressivity of the state's tax structure.

New Tax Proposal in Alabama

Alabama Governor Bob Riley is once again talking about lowering taxes on working families. But his latest proposal isn't without controversy and comes with quite a price tag. The Governor's proposal includes lowering taxes on families making less than $100,000 annually and eliminating the state income tax on the first $10,000 of retirement income. His plans take five years to fully implement and would cost $205 million. Some in the education community are concerned that these tax cuts will be paid for by cuts to the State's education budget. Questions also remain about whether or not the proposal provides targeted tax relief for Alabama families in need. Let's hope Governor Riley actually does more than talk about tax fairness and finds a way to pay for cuts without harming Alabama's children.

Can They Hoodwink the Show Me State? Or Sell a Lemon in the Peach State?

Opponents of tax fairness in Missouri and Georgia are pushing for the complete repeal of their states' individual income taxes. Because the personal income tax is the only major progressive tax levied by states, it provides an important counterbalance to regressive sales, excise, and property taxes. As a result, this proposal would have extremely regressive results in two states that need to move in the opposite direction. It would also leave a huge hole in the states' budgets -- which is bad news for children, the sick and elderly and just about anyone who isn't rich enough to fund a conservative think-tank or lobbying organization.