The voices of Tax Policy Center's researchers and staff
Bernie Sanders: Medicare, and tax increases, for all. The Democratic presidential hopeful proposed a $1.38 trillion universal health care plan and the tax hikes aimed to pay for it, just before Sunday’s Democratic debate. Sanders would impose a 2.2 percent income-based premium on all households, though he says many would come out ahead since he estimates a typical middle-income family would save $5,000 a year in health insurance premiums. He’d also raise marginal tax rates on the wealthy. His rates: 37 percent on income between $250,000 and $500,000; 43 percent on income between $500,000 and $2 million; 48 percent on income between $2 million and $10 million; and 52 percent on income over $10 million.
Will Colorado ditch TABOR? In Democratic Governor John Hickenlooper’s State of the State Address last week, he suggested that lawmakers revisit requirements under the Taxpayer Bill of Rights. TABOR limits spending increases and refunds unspent revenues to taxpayers. The governor would rather invest money in roads and schools. He also wants to exempt a $750 million hospital provider fee from TABOR requirements, an idea GOP state legislators strong oppose. Separately, an effort is underway to put a measure to rollback TABOR on the November ballot.
Grocery shoppers: “They’re not in Kansas, anymore.” A new study from Wichita State University's Kansas Public Finance Center finds that Kansas lost $345.6 million in food sales in 2013—even before the state raised its food sales tax rate to one of the highest in the country. Kansas residents in border counties are buying their food in Colorado or Nebraska, which exempt food from sales tax, or Missouri, where the tax rate is substantially lower than in Kansas.
The facts about VATs. TPC’s Len Burman explains why GOP hopeful Marco Rubio was correct in calling competitor Ted Cruz’s business flat tax a value-added tax (VAT): “Cruz’s business flat tax is a subtraction-method VAT. Businesses play a flat 16-percent tax rate on the difference between sales price and the cost of inputs purchased from other businesses—i.e., value-added.” The only differences between Cruz’s VAT and a European VAT lie in administration and scope.
Why donate when you can pay a tax? A United Nations study recommends an interesting way to close a $15 billion funding gap for humanitarian aid: Convince countries to add a small tax on tickets to soccer matches and other purchases. The idea isn’t new: The non-governmental organization Unitaid convinced 10 countries to impose a tax on airline tickets to raise revenue to fight malaria and AIDS. The UN report suggests a “solidarity levy” on a wide range of purchases, including fuel, concerts, movies, or sporting events.
Budget and tax fun today: The Congressional Budget Office releases its summary of its annual budget and economic outlook report. The full report will be released on January 25. Also today: Tax season officially opens—be careful out there.
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