AFP Tax & Spending Update - September 23rd, 2013
There’s a new report out on public pension spending, written by Senator Dan Liljenquist, which uses the case study approach to discuss four states that have moved to a defined contribution plan for public pensions (Michigan, Utah, Alaska, and Rhode Island).
Lawmakers must consider the personal income tax rates, not just corporate income tax reform, when they are looking at growing jobs and the economy. The income of non-corporate business income has grown by 5 times since 1980; 54 percent of all business income was earned by pass through business as of 2013. On average, sole proprietorships pay a 47.5 percent top marginal rate, while S-Corporations pay a 44.5 percent top marginal rate. (American Legislative Exchange Council)
This week the Congressional Budget Office released its annual long-term budget outlook. Hidden inside the page, CBO said that 53% of the growth of federal health care spending over the next 10 years will be due to Medicaid expansion and Exchange subsidies.
Though corporate income tax reform is often the topic of discussion when debating business taxes, a new Tax Foundation report points out that a large portion of American businesses file their taxes under the individual income tax.
AFP GA says, Stop the State Bailouts! Why should GA be on the hook for Illinois, California and NY’s failed experiments? New York owes $182 billion. Illinois owes $192 billion. California owes $398 billion. Believe it or not, these obligations are not the states’ debt, which are separate, but rather their unfunded public pension liabilities.
Scott Drenkard with Tax Foundation points out that sales tax bases matter just as much as tax rates. Similarly, the entire tax package employed by a state matters as well (for example, Tennessee has high sales tax rates but does not levy a broad-based income tax).
There’s a state tax calculator that just launched from the National Center for Policy Analysis, which allows taxpayers to enter various information about themselves and see how tax liability would change if they were to move to another state. The calculator can be found at http://whynotmove.org/.
Like this post? Chip in $5 to AFP.