On the same day that the New York City Independent Budget Office released a report showing that wealthy New York City residents who move are overwhelmingly choosing high-tax states to live in journalist David Cay Johnston penned an editorial in the Sacramento Bee again making the point that taxes are far from the major consideration in wealthy households’ location decisions. Examining the supposed economic destruction that never materialized as a result of California’s 2012 sales and income tax hikes, Johnston points out that quality “commonwealth amenities” like schools, law enforcement, and parks, are far better draws than low taxes.
Getting a 43 cent return on every dollar invested would seem like a bad deal to most of us, but that doesn’t seem to be the case when in comes to subsidizing the film industry in New Mexico. A new study finds that the state’s film tax breaks generated just 43 cents in tax revenue for every incentive dollar spent between 2010 and 2014. Read the full study here.
Moderate Republican lawmakers in Missouri are feeling the wrath of conservative donor Rex Sinquefield during this year’s election season. The Missouri Club for Growth, a group funded largely by Sinquefield, has thrown its support (and dollars) behind candidates running against Republican legislators who voted with Democrats this year to uphold Governor Jay Nixon’s veto of an irresponsible income tax cut package. Though the wealthy donor has thus far seen very few victories for his conservative state fiscal agenda, there is evidence that his ideas may slowly gain traction over the years as his money continues to roll in, spelling disaster for anyone concerned with fiscal responsibility and progressive taxation.
Corporate tax avoidance is back in the spotlight in the wake of an Oregon Supreme Court ruling that allows profitable companies to avoid paying the state’s minimum corporate tax. The minimum tax, which was sensibly expanded from a trivial $10 to a higher, tiered structure due to a vote of the people in 2010, can now be reduced to zero by companies claiming certain tax credits. The problem is that the statutory language of the minimum tax does not explicitly say that tax credits can never be used to offset the minimum tax. This will likely come as unwelcome news to Oregon voters, who presumably thought that when they approved a measure “establishing a flat $150 minimum tax,” they were doing just that. But this case, led by Con-Way Inc., means that the state can anticipate a $40 million hit this year as corporations rush to amend prior years’ returns to take advantage of the loophole. The good news: the court decision is based on a technical glitch in the minimum tax statute, and glitches are easily fixed. Petitioners are now calling on state lawmakers to modify the language of the law to ensure that companies like Con-Way will pay a “minimum tax” that actually exceeds zero.