Sunday, July 24, 2005


Taxachusetts to cut tax?: "With state tax revenues soaring, lawmakers on Beacon Hill are advancing a proposal to lower the Massachusetts income tax rate, if state spending is restored to levels last seen before the fiscal crisis began three years ago. The Senate unanimously approved a Republican measure Thursday that would trigger a series of income tax rate reductions to lower the rate to 5 percent from 5.3 percent, but only if state spending on education and municipal services reaches 2002 levels. The fiscal crisis prompted lawmakers to slash funding that year. Passage of the bill by the Senate, where the Democrats have a large majority, is the first sign that Democrats may be warming to the idea of an income tax cut."

Globotaxes: "Most Americans have come -- correctly, if reluctantly -- to the conclusion the United Nations has been a failure. Sixty years ago, the U.N.'s founders envisioned it as an engine of freedom, an international mechanism in which sovereign nations would come together to protect liberty and to facilitate its spread throughout the world. Instead, for most of its life, the 'world body' has been dominated by the unfree. Under their influence, the U.N. has morphed into a protection racket for the world's despots and, effectively, an abettor of those who would supplant liberty with corrupt authoritarianism, or worse. In recent months, evidence of how far the United Nations has strayed from its original purpose has steadily leached into plain sight."

The Ohio lesson: "In 1970, Ohio had one of the lowest tax burdens in the Union--it now has one of the highest. As of 2005, the state's tax burden, as estimated by the Tax Foundation, is 35.8% higher than it was in 1970, the largest increase in the nation over this period. The next largest, 26.5% in Arkansas, was far smaller, and the average increase in the U.S. tax burden was just 3.1%. Over the past decade alone, Ohio's state and local government direct spending per $1,000 of personal income has risen 19.6%, by far the highest such spending growth in the region and light years beyond the 6.8% figure for all states. To finance this expansion, higher taxes have come along hand-in-hand. The consequences have been harsh. Since 1970, Ohio's share of the nation's personal income has declined from roughly 5.3% to under 3.8% today. In the first quarter of 2005, Ohio had the fifth highest unemployment rate in the U.S. at 6.2% versus the overall unemployment rate of 5.3%. Meager Ohio employment growth of 0.3% through the first quarter placed the state third-to-last nationally, far behind the U.S. overall rate of 1.7%. With falling relative incomes, high unemployment and poor job growth, it is no wonder that people are voting against Ohio with their feet. State-to-state migration shows Ohio losing residents, while total population growth of 0.2% ranks it a dismal 47th in the nation".

Panel suggests repealing alternative minimum tax : "A federal tax-reform panel advising President Bush called Wednesday for repeal of the alternative minimum tax, which has mushroomed from a law targeted on the rich to one that threatens more than 20 million taxpayers with higher taxes next year. The panel's chairman, former senator Connie Mack of Florida, cited the AMT's 'extremely negative effect' on middle-income taxpayers as the nine-member panel reached its first conclusion."

"Death tax" in final throes? "Final repeal of the estate tax is high on the agenda of the White House and congressional Republicans. It has already passed the House, but vote counters are not sure they have 60 votes needed in the Senate to avoid a filibuster. This has emboldened estate tax supporters, who want to keep it alive any way possible. There is a lot of pressure to resolve the issue one way or another this year. Under current law, the estate tax is repealed for one year, 2010, but comes back again in 2011. This nonsensical law is the result of Senate budget rules that prohibited enactment of permanent repeal in 2001. But the result makes estate planning almost impossible, since no one has any idea what the tax regime will be after 2010."


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