The voices of Tax Policy Center's researchers and staff
Pot tax refunds for all in Colorado? Colorado’s controversial Taxpayer Bill of Rights (TABOR) says that the state cannot keep more tax revenue than it expected to collect in the year it levies a new tax. Colorado is on track to collect an extra $219 million in revenue in the current fiscal year and $59 million is expected to come from the new 28 percent pot tax. Barring a dramatic economic downturn between now and June 30, Colorado taxpayers, pot smokers or not, may be in for a bit of a windfall.
What does California’s experience with dynamic scoring teach us? In the latest post in the TaxVox dynamic scoring forum, Brad Williams, former Director of Budget Overview and Fiscal Forecasting for the California Legislative Analyst's Office, describes why that state’s dynamic revenue estimating was allowed to die: There was no “victory for either side of tax policy debates. The results undercut extreme supply-side claims that tax cuts would ‘pay for themselves’… [and] were inconsistent with claims that tax policies do not matter in terms of economic competitiveness.”
IRS audits businesses at the lowest rate since 2005. Bloomberg reports that the IRS audited 0.57 percent of US businesses last year. That’s 57,211 firms, compared to 61,020 in 2013. The IRS audited 26 percent of businesses with more than $250 million in assets in 2014, compared to 34 percent the year before. More IRS data are available in the IRS Winter Statistics of Income Bulletin.
Timing is everything, when it comes to estimates. April is the most important month of the year for individual taxpayers and the federal and state governments that rely on them for revenue. A new TPC brief examines how timing of events like the fiscal cliff drama of 2012 affects state budget outlooks and how state economists grapple with uncertain federal policy affecting income tax revenue.
On the Hill. Yesterday, GOP Senator Chuck Grassley announced that he’s working on a bill to make undocumented immigrants ineligible for the Earned Income Tax Credit. IRS Commissioner John Koskinen says the IRS will continue to allow eligibility given the President’s executive actions on immigration. Today, the Senate Finance Committee holds a hearing on fairness in taxation, featuring Lawrence Lindsey of The Lindsey Group, Deroy Murdock of Fox News, Heather Boushey of the Center for Equitable Growth, and Steven Rattner of Willett Advisors. The Joint Committee on Taxation prepared background data related to the distribution of income and taxes for the hearing.
Tomorrow at SCOTUS. The US Supreme Court will hear arguments in King v. Burwell. The plaintiffs claim that federal tax subsidies that helped about 7.5 million people purchase health insurance through the Affordable Care Act are not legal in at least 34 states where the feds are operating the ACA’s health exchanges. A decision is expected in June.
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