Nothing I have written in more than two years at TaxVox has attracted more attention than my August, 2009 piece on the Happy Act. This bill, sponsored by Representative Thaddeus McCotter (R-MI), would allow people to deduct up to $3,500 from their taxes to subsidize the cost of, no kidding, pet care.

On Black Friday, the New York Times published an editorial praising a New York state law requiring on-line retailers to collect applicable state sales tax on all purchases. The requirement, in abeyance pending court challenges, makes a lot of sense. Yet history doesn’t bode well for the new law. And states are likely to continue to lose precious revenue as on-line sales grow.

The White House is delaying the report of its tax reform panel until “after the holidays.” According to a blog posting by top economic adviser Austan Goolsbee, the President's Economic Recovery Advisory Board is delaying the report so it can review new proposals for reform. However, the panel still plans to release only what board chairman Paul Volcker calls “an almanac” of reform ideas. It will not endorse specific proposals or make any recommendations. The report had been due on Friday.

The Pew Center on the States has done a good job documenting the dysfunction in current state budgets. “Beyond California: States in Fiscal Peril” uses both political and short-term economic variables to rank the states. And it shows that while California gets all the attention because its numbers are so big, many states across the country face their own severe financial problems. Some are suffering from bad economic fundamentals (think Michigan). Others are struggling with politics (hello, Arizona).

“Democrats health bills depend on forcing individuals to buy insurance or face severe fines or imprisonment.” George Will, Nov, 19, 2009 Before we spin off into a Thanksgiving reprise of last summer’s death panel lunacy, let’s be clear. Nothing in Will’s statement is true.

IRS Commissioner Doug Shulman reports that nearly 15,000 taxpayers turned themselves in under the service’s amnesty program for people who had failed to report overseas bank accounts on their federal income tax returns. A major inducement was the government’s settlement with Swiss bank UBS, under which the bank promised to hand over information on about 4,500 American account owners. More than 80 percent of the amnesty filings came after the IRS announced that settlement.

Senate Majority Leader Harry Reid (D-Nev.) has pulled together a health bill that relies on three major revenue sources (and many smaller ones) to help support the cost of new insurance subsidies for those with low- and moderate-incomes.

Increasingly generous tax subsidies for homeowners are doing little to help the housing market. The U.S. Census Bureau reported yesterday that housing starts for October were down 10.6 percent from the previous month to a seasonally adjusted annual rate of 529,000. After rebounding from a historical low of 479,000 in April, starts have largely moved sideways and reflect a still-anemic housing market.

The Treasury Inspector General for Tax Administration reports that more than 15 million people could owe more income tax than usual next April, thanks to the 2009 stimulus act’s Making Work Pay credit (MWP). New withholding tables accommodating the credit are overly generous to people who work multiple jobs, pension recipients, and two-earner couples. For them, withheld taxes will drop more than the credit will cut what they owe the IRS.

In the ongoing search for money to pay for health reform, Senate Majority Leader Harry Reid (D-Nev.) reportedly wants to raise the Medicare payroll tax rate for high earners. It is not the best way to generate revenue, but it is not the worst either.