Recent Work
2096 items
Alaska Senate State Affairs Committee Regarding SB 29, The Alaska Tax Break Transparency Act
March 6, 2012 • By Carl Davis
My testimony today deals with Senate Bill 29, which would take an important first step toward achieving these goals by requiring regular scrutiny of Alaska “tax expenditures”—that is, the various tax credits, deductions, exemptions, and other breaks that reduce Alaska tax revenue. The basic insight behind the idea of “tax expenditures” is that a law […]
SB 249 would permanently reinstate the “millionaires’ tax” that expired at the end of 2010. This testimony emphasizes that the “millionaires’ tax” makes Maryland’s tax system at least somewhat less unfair than it otherwise would be; that reinstating the tax would result in a substantial federal tax cut for upper-income Marylanders; and that claims about […]
Arthur Laffer Regression Analysis is Fundamentally Flawed, Offers No Support for Economic Growth Claims
February 15, 2012 • By Carl Davis
A November 2011 report from the Oklahoma Council for Public Affairs (OCPA) in partnership with Arduin, Laffer & Moore, a consulting group headed by Arthur Laffer, explains the method that Laffer has been using to make the case that tax cuts lead to economic growth. The results he offers appear impressive, but his methods are […]
“High Rate” Income Tax States Are Outperforming No-Tax States
February 8, 2012 • By Carl Davis
Don’t Be Fooled by Junk Economics With the economy lagging, lawmakers seeking to reduce or eliminate state personal income taxes are touting their proposals as tools for boosting economic growth. Of particular note are the governors of Kansas and Oklahoma, both of whom justified income tax repeal in their State of the State speeches by […]
Kansas Governor Tax Proposal: Wealthy Kansans Pay Less, Poor and Middle-Income Kansans Pay More
January 11, 2012 • By Meg Wiehe
Kansas Governor Sam Brownback unveiled his long anticipated tax plan last week. Sweeping changes to reduce the state’s reliance on its progressive personal income tax are at the core of the proposal. The plan cuts income tax rates, eliminates a variety of income tax deductions and credits, and makes permanent a temporary sales tax rate […]
State gas taxes are currently levied in every state, and are the most important source of transportation revenue under the control of state lawmakers. In recent years, however, state gas taxes have fallen dramatically relative to the rising cost of asphalt, concrete, labor, and everything else that goes into maintaining a transportation network. The results […]
In October, South Carolina Governor Nikki Haley suggested that gradually repealing the state’s corporate income tax should be a priority for lawmakers in 2012. Haley’s idea was alarming, but hardly surprising: in the past year, governors in Arizona and Florida have proposed similar plans, and lawmakers in a number of other states have moved to […]
Earlier this year, Berkshire Hathaway Chairman Warren Buffett made headlines by publicly decrying the stark inequity between his own effective federal tax rate (about 17 percent, by his estimate) and that of his secretary (about 30 percent). The resulting media firestorm has drawn welcome attention to unfair tax breaks that allow the richest Americans to […]
Given the challenging fiscal climate facing Kansas, the proposed income tax plan should be thought of not simply as a tax cut but as a tax swap. News reports confirm our expectation that revenues from income taxes would be at least partially replaced by sales and property taxes under the Governor’s plan. The graphic below […]
Lawmakers often provide targeted tax cuts to groups of individuals or corporations in the form of special tax breaks--including exemptions, deductions, exclusions, credits, deferrals, and preferential tax rates. These tax breaks have long been called "tax expenditures" because they are essentially government spending programs that happen to be administered through the tax code. However, tax expenditures are usually less visible than other types of public spending and are therefore harder for policymakers and the public to evaluate. This policy brief surveys the difficulties created by tax expenditures, and describes options for better integrating them into the normal budget process.
Efforts to increase sales and income taxes usually face some opposition. Yet in many states, lawmakers have been able to agree on one approach to revenue-raising: the cigarette tax. In the past several years nearly every state has enacted a cigarette tax increase to help fund health care, discourage smoking, or to help balance state budgets. This policy brief looks at the advantages and disadvantages of cigarette taxes, and cigarette tax hikes, as a state and local revenue source.
Uncertain Benefits, Hidden Costs: The Perils of State-Sponsored Gambling
October 1, 2011 • By Meg Wiehe
The recent fiscal downturn forced cash-strapped, tax-averse state lawmakers to seek unconventional revenue-raising alternatives, for additional revenue-raising opportunities outside of the income, sales and property taxes that form the backbone of most state tax systems. One of the most popular alternatives to those major revenue sources is state sponsored gambling. As this policy brief points out, however, gambling revenues are rarely as lucrative, or as long-lasting, as supporters claim.
This report presents a comprehensive view of anti-poverty tax policy decisions made in the states in 2011 and offers recommendations every state should consider to help families rise out of poverty. States can jump-start their anti-poverty efforts by enacting one or more of four proven and effective tax reforms: refundable state Earned Income Tax Credits, […]
Low-wage workers often face a dual challenge as they struggle to make ends meet. In many instances, the wages they earn are insufficient to encourage additional hours of work or long-term attachment to the labor force. At the same time, most state and local tax systems impose greater responsibilities on poor families than on wealthy ones, making it even harder for low-wage workers to move above the poverty line and achieve meaningful economic security. The Earned Income Tax Credit (EITC) is designed to help low-wage workers meet both those challenges. This policy brief explains how the credit works at the…
State governments provide a wide array of tax breaks for their elderly residents. Almost every state levying an income tax now sensibly allows some form of income tax exemption or credit for its over-65 citizens that is unavailable to non-elderly taxpayers. But many states have enacted poorly-targeted, unnecessarily expensive elderly income tax breaks that make state tax systems less sustainable and less fair. This policy brief surveys approaches to elderly income tax relief and suggests options for reforming state tax breaks for seniors.
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