"If lawmakers want to cut their state income tax, they should consider the fact that a significant percentage of that tax cut will not end up in their constituents' pockets because they will have a lesser amount of state taxes to deduct from their federal taxes and, thus, will have higher federal tax bills," said Carl Davis, research director at ITEP. "And even if it is sometimes politically unpopular, increasing income taxes has the opposite effect. Policymakers should keep in mind that if they raise state taxes, the federal government will shoulder some of that increase because state residents will receive larger deductions from their federal income taxes."
This week we are highlighting tax and budget news in New Jersey, Minnesota, Illinois, California and Colorado. Be sure to check out the What We're Reading section for the latest on marijuana laws, state film tax credits, and a new income equality report. Thanks for reading the Rundown!
Tim Cook is a persuasive CEO. In a wide-ranging interview published earlier this week in the Washington Post, he discussed his vision for the company, thoughts about leadership succession, and he humbly admitted he has made mistakes.
So it would be very easy to view as reasonable his declaration that Apple will not repatriate its offshore profits until the United States enacts a "fair" tax rate.
Apple Inc. is not only the world's leading cell phone designer, it is also number one when it comes to falsely asserting that most of its profits are earned in tax havens. The company has $215 billion in profits that it pretends are offshore, thus is avoiding an estimated $66 billion in U.S. taxes. Apple's enormous stash alone accounts for nearly 10 percent of the $2.4 trillion in profits that multinational companies claim are offshore for tax purposes.
With the exception of New Jersey, the dust has now settled on most state legislatures' 2016 tax policy debates. Many of the conversations that took place in 2016 were quite different than those that occurred over the last few years. Specifically, the tax cutting craze sparked by the election of many anti-tax lawmakers in November 2010 has subsided somewhat--at least for now. For every state that enacted a notable tax cut in 2016, there was another that took the opposite path and opted to raise taxes. And contrary to what you may expect, the distinction between tax-cutting and tax-hiking states did not always break down along traditional partisan lines.
This week we've got updates on tax and budget news in Oregon, Louisiana, Nebraska, Alabama and California. Be sure to check out the What We're Reading section for links about the latest on Kansas, an editorial from the Wall Street Journal and a new report from The Brookings Institution. Thanks for reading the Rundown!
When Bad Policy Meets Worse Policy: Mississippi's Solution to Revenue Hole Seems to Be 'Keep Digging'
A legislative study of Mississippi's tax code kicked off recently, with committee members giving special consideration to cutting overall taxes in the state and shifting away from the state income tax toward a “user-based system” (i.e. a heavier reliance on...
In the Tax Justice Digest we recap the latest reports, blog posts, and analyses from Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Here's a rundown of what we've been working on this week.
Tax simplification is usually a goal that everyone can agree on. It makes filing taxes easier for the general public, and makes it easier for tax administrators to effectively enforce the tax laws. Yet as this fall's general election campaign gears up, it's increasingly clear that the two major-party presidential candidates either aren't prioritizing tax simplification (in the case of Hillary Clinton), or are only pretending to do so (Donald Trump).
Donald Trump's Revised Tax Plan Fails to Answer Hard Questions, Remains a Budget-Busting Giveaway to the Wealthy
Donald Trump's advisors have tried to spin his economic address earlier this week as yet another reboot of his campaign and of his tax reform plan.
Trump's speech, coupled with the abrupt disappearance of his original tax plan from his campaign website, made it clear that his original tax plan has been "fired."
He now embraces the higher personal income tax rate structure proposed by House Speaker Paul Ryan, and he also proposes a new tax break for child care expenses. Overall, however, the campaign has left many questions unanswered by releasing only limited details. This may be a deliberate strategy or a sign that the campaign has not fully fleshed out a revised proposal.