Would a financial transactions tax heal the market’s ills? Probably not. TPC has a new paper that considers the question. Its conclusion: At the rates being debated in the US, an FTT would discourage trading, and be just as likely to churn markets as calm them. Moreover, over the long term, it’s not likely to curb the financial sector excesses that led to the Great Recession.
Ways & Means staff hires. New committee chair Kevin Brady has hired Barbara Angus as Chief Tax Counsel. Angus was International Tax Counsel for the Treasury Department in the George W. Bush Administration and Business Tax Counsel for the Joint Committee on Taxation. She currently leads international tax policy services for Ernst & Young.
In Kansas: An incentive for small business creation comes at a high price. For the state, anyway. Hundreds of thousands of taxpayers could exempt themselves from the state income tax starting in 2012 simply by saying they were self-employed or small businesses. By 2013, over 330,000 taxpayers took advantage of the tax cut, 50 percent more than state officials predicted. The boom in these new small businesses was supposed to generate explosive job growth. Instead, it’s busting the state’s budget, helping turn a big surplus into a $190 million shortfall.
What happened when Georgia’s tax break ended for electric vehicles? The Georgia legislature got rid of a $5,000 tax credit for anybody who bought or leased an EV last year and electric vehicle registrations dropped by 90 percent. The legislature may consider a smaller tax credit this year, but lawmakers have already imposed a $200 road user fee on alternative fuel vehicles, including electric cars.
Will Indiana tax travel sites? A bill before the state’s Senate would tax the service fee that websites like Travelocity and Expedia charge for online hotel purchases. The tax could bring state and local governments $18.7 million over two years. Supporters say the tax would make taxation fairer among businesses. Opponents say travel sites would pass it on to consumers. The idea has been the subject of political and legal battles in several states.
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