The Oklahoma Supreme Court recently approved a ballot measure (779) that will, if approved by voters, increase the state sales tax by 1 percent. The new revenue would be earmarked to fund $5,000 pay raises for Oklahoma teachers and provide support for the state's colleges and universities. The question before the court was whether the proponents had gathered the requisite number of signatures; the court said yes. But the tax issue is much more interesting.
Tax Analysts Blog
George Voinovich, both a two-term senator and governor of Ohio, died June 12. Voinovich was an extremely popular governor known primarily for his fiscal discipline. Many of the remembrances of the Ohio politician have praised him for standing against his Republican allies and opposing the 2003 tax cuts proposed by George W. Bush. Lost in some of the discussion is that Voinovich was a supporter of the far larger 2001 tax cut legislation and that other Republicans did much more to try to derail Bush's plans.
Donald Trump is a big fan of tariffs. He’s made them a cornerstone of his get-tough trade policy, suggesting (among other things) a 45 percent import duty on Chinese goods and a 35 percent tariff on cars manufactured in Mexico. And as Time magazine recently observed, he’s not the least bit concerned about the potential fallout. “Who the hell cares about a trade war?” he said last month.
Certain tenets of tax policy are so thoroughly ingrained in our thinking that to question them seems almost sacrilegious. Among these is the doctrine that corporate income should be taxed once and only once. Typically that singular occurrence of corporate tax is imposed by the country with the strongest jurisdictional claim over the relevant corporate entity (residence-based taxation) or the economic activity that gave rise to the income (source-based taxation). It naturally follows that double taxation is an abomination that must be eliminated at all costs. This reflexive aversion to double taxation heavily influences our nation’s tax laws. It also features prominently in the international norms set by multilateral bodies such as the OECD.
While the Republicans have struggled to win the presidency in the last few election cycles, the party has made impressive gains elsewhere. In fact, the GOP could set a record this fall by holding more than 32 governors' mansions at the same time. There are 31 Republican governors, and the races look set up to allow the party to add two or three more on Election Day. If they do, the tax outlook in those states will change dramatically.
This isn’t the first time I’ve written about this, and it won’t be the last. Part and parcel of maintaining a transparent tax system is having a press that can report on important issues and the actions of the government. Reporters can’t do that without sources willing to speak on the record and without access to events where government officials are speaking.
In case you missed it, U.S.-based Terex Corp. has substantially altered its proposed merger with Finland’s Konecranes PLC. The original all-stock deal would have resulted in current Terex shareholders acquiring roughly 60 percent of the newly formed firm, which would have been based overseas. Instead, the two companies are now eyeing a much smaller cash and stock transaction that would be limited to an acquisition of two of Konecranes’ business units. Terex’s explanation for the change of plans is straightforward: The anticipated tax benefits are no longer available.
Mississippi Gov. Phil Bryant (R) recently signed what people are calling the largest tax cut in state history. The cuts will total about $415 million over the next 12 years. That's a lot, considering Mississippi's overall budget. One aspect of the measure (SB 2858) is good from a tax policy perspective: the phaseout of the state's corporate franchise tax.
Given the economic and political stakes, here is one question that Americans should want Donald Trump to answer: If elected, will he exercise the nuclear option and blow up Europe?
Donald Trump likes to compare himself to Ronald Reagan, especially when trying to explain how a former Democrat finds himself at the top of the GOP ticket. But Reagan and Trump have something else in common, too: The Gipper, just like The Donald, wanted to keep his tax returns private.