Death to the Minnesota estate tax? Minnesota House Republicans want the state’s estate tax to affect fewer bequests, sooner. Right now, if a decedent’s is worth $1.4 million or more, the estate tax pays at a rate starting at 9 percent and rising to 16 percent. Fewer than 3 percent of Minnesota estates pay, and the threshold is due to rise to $2 million in 2018. But the House would raise the exemption to $2 million this year and $5 million in 2018. At that point, the few remaining taxable estates would be taxed at a flat 16 percent rate.
North Dakota lawmakers approve an oil tax change. Oil drillers will avoid the state’s 6.5 percent extraction tax if for the fifth consecutive month the average price of oil drops below $55.09 a barrel. That’s likely to happen by June 1, and would cost the state $863 million in lost revenue through April 2016. To avoid this, GOP lawmakers proposed to cut the extraction tax rate to 5 percent but ditch the $55.09 price trigger. A separate 5 percent production tax on oil would remain. State budget analysts estimate the proposal would add $35 million in revenue over the next two years.
Tax cuts mean public education cuts in Kansas, and maybe, inequality. The Boston Globe traces GOP Governor Sam Brownback’s tax cuts and their impact on public school funding. Kansas faces a significant budget shortfall, and to close the gap, hundreds of millions of dollars are being cut from school districts’ budgets. State contributions to schools have been cut, and the state’s equalization formula has been replaced with fixed and largely frozen payments for the next two years. The cuts have hit poorer school districts especially hard.
Do you feel freer today? Or perhaps, bemused? Tax Freedom Day was Friday, April 24, according to the Tax Foundation: It’s the day when “the nation as a whole has earned enough money to pay its total tax bill for the year.” To get to that amount, the Tax Foundation calculates an average tax rate by measuring tax revenues as a share of the economy. The Center on Budget and Policy Priorities notes that in the US, “only upper-income households (the top 20 percent) pay tax at rates that are equal to or above revenues as a share of the economy.” The rest of us were free some time ago.
Back on the Hill… Tax Analysts reports that House Majority Leader Kevin McCarthy expects the House and Senate to consider the conference report on the fiscal 2016 budget resolution this week.
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