Debt and Tax Cuts: What’s not to love? Several GOP candidates trumpet tax plans that would add to the deficit. As The Hill reports, while they might not promise that tax cuts will pay for themselves, they do claim overhauling the tax code would spur economic growth. True or not, it’s rather difficult to forecast the effect of tax policy on economic growth. There’s a debate tonight: Will candidates make it look easy?
Chicago Mayor Rahm Emanuel wants to take the sting out of a city property tax hike. He’s about to propose a $450 million to $550 million increase in the city levy in order to meet a state-required increase in funding for police and firefighter pensions. He wants to exempt some homeowners from the increase, those with houses worth $250,000 or less. Emanuel needs state legislative approval of his plan, but GOP Governor Bruce Rauner wants to freeze statewide property taxes for two years. Rauner’s not keen on giving Emanuel political cover for a tax increase by approving an exemption. Will Rauner risk Chicago homeowners’ wrath?
States’ revenues from taxing gambling have been flat since the Great Recession—Why?Research from The Rockefeller Institute shows that after adjusting for inflation, casino tax revenue in 16 states increased just 0.1 percent in fiscal 2015 compared to the year before. What gives? “Most of the casino gamblers are the elderly population,” said Lucy Dadayan of the Rockefeller Institute. “The gaming industry is trying hard to attract a younger population.” Traditional gambling, like playing slots, isn’t seen as a particularly fun social experience—at least not by Millennials.
North Carolina may soon have a budget deal, a couple months late. The compromise $21.7 billion spending plan for 2015-16 would boost state spending by 3.1 percent overall and cut the state tax burden by $400 million. Under the compromise, the personal income tax rate would fall from 5.75 to 5.499 percent in 2017. The “zero bracket” would expand, too: In 2016, married filers would owe no income tax on their first $15,500 of earnings, up from $15,000 this year. The deal would also restore a deduction for medical expenses and extend a tax credit for preserving old warehouses and other historic properties. But certain sales taxes would go up on product installation and warranties.
In Minnesota, you can drive but you can’t hide. Some residents have been trying to avoid paying their 6.5 percent motor vehicle sales tax by registering their cars in sales-tax-free Montana. But the Minnesota Department of Revenue is working with law enforcement to track down those residents and collect what’s owed. Since 2010, those car owners have paid more than $1.1 million in taxes, penalties, and interest. Some may even face criminal charges.
On the Hill… The Senate Finance Committee will consider a new bill to prevent identity theft and tax refund fraud, a bill that would also give the IRS more power. Tax Analystsreports that the House Ways & Means Committee plans to mark up several tax and healthcare bills tomorrow, including separate ones that would make bonus depreciation and the subpart F active financing exemption permanent.