Tag Archives: taxation

Tax reform, part 4: Corporate tax reform

Source: Independent Institute
by Randall Holcombe

"The United States has one of the highest corporate income tax rates in the world. While both the Obama administration and Trump administration have criticized American companies for moving operations off-shore, and considered a variety of policies for punishing them if they do. A better approach would be to design policies that make it attractive for all corporations to locate their operations in the United States. One way to do that would be to lower the corporate tax rate." (08/17/17)


Philly moves the goalposts on soda tax

Source: Independent Institute
by William F Shughart & Josh T Smith

"When you're losing, it’s good advice to play another game. Or do as Philadelphia has done with its recent soda tax: Change the rules and move the goalposts. Though the soft-drink tax was pitched primarily as a boon for pre-K education and, secondarily, for its supposed health benefits, only 49 percent of the funding actually is slated for pre-K. Apparently, it's not just 'for the children.' As much as 20 percent will go to city programs and benefits for public employees, with an additional 9 percent earmarked for programs like the Community College of Philadelphia. The bait-and-switch goes to show that politicians who think they can engineer positive social outcomes by fiddling with the tax system make big promises but usually can't be trusted to fulfill them." (08/16/17)


Tax reform, part 3: Tax employer health care benefits; offer a tax credit to health insurance purchasers

Source: Independent Institute
by Randall Holcombe

"In an earlier blog post I suggested eliminating all personal tax deductions, with a possible exception related to health care. One of the well-publicized problems with the American health care system is that employer-provided health insurance is not taxed, pushing us to a system in which people get health insurance from their employers. A better option would be to allow a competitive market in which people shop for their own health insurance, as they do with homeowner insurance, auto insurance, life insurance, and really, all insurance except for health insurance." (08/16/17)


Tax reform, part 2: Lower rates; eliminate deductions

Source: Independent Institute
by Randall Holcombe

"As Congress considers tax reform, the focus on the personal income tax should be to lower rates and eliminate all deductions except for a standard deduction that applies to everyone. Lower rates enough to offset the increased revenue from eliminating deductions, and set the standard deduction at a level that raises the same amount of revenue as the pre-reform tax system. Personal income tax reform should be revenue-neutral. That avoids debates on whether taxes should be raised or lowered and focuses on making the tax system fairer and more efficient. I propose a flat rate of 22% on all income beyond the standard deduction. Set the standard deduction at a level that satisfies the revenue-neutrality criterion." (08/15/17)


Tax reform 1: Expand the IRA

Source: Independent Institute
by Randall Holcombe

"As Congress turns its attention to tax reform, one desirable change would be to expand the availability of IRA accounts to more taxpayers, with higher limits, and for purposes other than retirement." (08/14/17)


A flat tax is not more "efficient" than a tax system with loopholes

Source: Ludwig von Mises Institute
by Per Bylund

"A frequently repeated claim is that loopholes in the tax code are 'inefficient.' A more efficient tax, economists say, is a flat and all-encompassing tax that is inescapable. Why? Because this means no one will waste resources on tax planning and thus tax avoidance. In other words, more resources will be used in production, which is better for the 'economy.' Leaving the moral and ethical argument about tax avoidance aside, the efficiency argument too is completely wrong. It shows how much economists have deviated from understanding what they supposedly try to learn about: the market." (08/10/17)


CA: Wealthy San Francisco residents lose private street over tax bill

Source: BBC News [UK state media]

"Residents of an illustrious San Francisco private street where homes sell for millions have had the street itself bought from under them. Presidio Terrace is now owned by two investors, Tina Lam and Michael Cheng, who snapped up the private road for about $90,000 (£69,039, €76,203). The street — parking, pathways and all — was sold by the city over a $14-a-year tax which went unpaid for decades. Wealthy residents say they knew nothing about the sale until it was done The result is that residents no longer own the road, pavements, trees, or any of the common land — and might have to pay its new owners for parking." (08/08/17)


IL: Judge OKs Cook County soda tax, but start date is unclear

Source: Chicago Tribune

"Shoppers may see Cook County’s penny-per-ounce sweetened beverage tax on their grocery receipts in the not-so-distant future after a judge dismissed a lawsuit Friday that called the tax unconstitutional. Cook County Circuit Judge Daniel Kubasiak also dissolved the temporary restraining order that had halted implementation of the tax, which originally had been set to take effect July 1. It was not immediately clear when the tax will take effect. The tax, which applies to a vast array of sugar- and artificially sweetened drinks, was championed by Cook County Board President Toni Preckwinkle and approved by commissioners last fall — one of several so-called soda taxes popping up in municipalities across the country. But last month, the Illinois Retail Merchants Association sued the county, arguing the tax ordinance is vague and unconstitutional." (07/28/17)


Now it's time for tax cuts — and Republicans are more divided than ever

Source: The Intercept
by David Dayen

"When presidents fail, it creates a snowball effect. George W. Bush couldn’t privatize Social Security and his legislative agenda never recovered. Bill Clinton’s abandonment of health care reform led it to tackle small-ball measures. Both were punished by voters for their failures in the next midterm, losing control of Congress and the ability to get anything else done. Voters don’t like losers. That’s bad news for House Republicans. Fresh off the (probable) failure to repeal the Affordable Care Act, they are pivoting to tax cuts. But along the way, for procedural reasons, they need to pass a budget." (07/21/17)


Why are Republicans pushing for a new tax on advertising?

Source: Foundation for Economic Education
by Terry Schilling

"Let’s not forget that the American Revolution was fought in large part over the Stamp Act, an advertising tax that imposed a fee of two shillings for every ad. The tax was hated to such a high degree that the then-British colonists coalesced together to intimidate stamp collectors into resigning. For that reason, the tax only managed to last for about a year. When the colonists finally had the chance to form their own country, they ensured that the Constitution, through the First Amendment, prohibited the government from regulating the freedom of speech and the press. To this day, taxing or regulating advertising remains unconstitutional. That’s why in Thomas v. Collins (1945), the Supreme Court made clear that free speech includes goods like advertisements, saying: 'The idea is not sound … that the First Amendment’s safeguards are wholly inapplicable to business or economic activity.'" (07/12/17)