Tax Policy

One week after the President unveiled the American Jobs Act, House Speaker John Boehner delivered an address before the Economic Club of Washington outlining the GOP’s Plan for America’s Job Creators.  While the President’s $450 billion plan relies on a 60/40 mix of tax measures and new spending to stimulate job growth, Speaker Boehner’s proposal rejects short-term spending in favor of a three-pronged agenda of long-term tax reform, deregulation, and reduced government spending. 

The President fired a shot across the bow of Congress last night with his $450 billion proposal to address the jobs crisis.  In a reprise of the Recovery Act of 2009 (the “stimulus”), the majority of new spending in the proposal would flow through state and local government with over $110 billion devoted to infrastructure and education alone.  However, state budget planners need not revise their mid-year predictions just yet as the bill will face a hurricane-force headwind as soon as it hits the House of Representatives next week. 

Leaders of the nation’s largest state and local associations were summoned to the White House this morning to hear a preview of the President’s forthcoming jobs address from Danielle Gray, Deputy Director of the National Economic Council, and Cecilia Muñoz, White House Director of Intergovernmental Affairs.  While the administration is trying to keep a close hold on details in advance of the speech, it is clear that the President will propose both a continuation of existing programs and new initiatives across three major policy areas: taxes, infrastructure, and unemployment assistance.

Led by a rebound in durable-goods manufacturing, the economy of every Midwestern states grew in 2010, the first time such uniform growth has occurred in the region in three years. The rise in economic activity was most pronounced in Indiana and North Dakota.

Surprising many in the state, state Senator Rollie Heath delivered more than 142,000 signatures to the secretary of state's office in support of a ballot initiative that would increase taxes to raise over $3 billion for education.  Sen. Heath, who authored the initiative, announced the petition drive in May, and claims to have personally obtained more than 1,000 signatures.

Governing reports that no less than seven bills to preempt state and local taxes are being considered in Congress.  The bills would restrict taxation of everything from out-of-state corporations’ income to temporary employees’ wages to the sale of online music, mobile phone service, and satellite television. 

Since 1935, The Book of the States has been the resource for state information for state leaders. Today—perhaps more than ever—access to up-to-date and reliable data and information is a key ingredient to developing successful state strategies and evidence-based solutions to the tough challenges policy leaders face.

Now, policymakers have a new tool: The Book of the States Regional Analysis Series.

State revenues appear to be rebounding, but generally remain below pre-recession levels. At the start of 2011, state corporate income tax rates1 largely mirrored those assessed in 2007 - three states had raised rates, while five had lowered them. More change may be on the way in the 2012 fiscal year, as debate continues on issues like nexus thresholds and taxation of out-of-state entities.

New pieces in the Seattle Times and the Detroit Free Press give updates on film tax incentive scale-backs in Washington and Michigan.  Each is written from the perspective of impacted workers and businesses.      

For more on film tax credits from CSG, including comments from the director of Washington’s film incentive office, see a recent E-News brief and a related blog post.     

“Alphabet soup,” a phrase observers used to describe President Roosevelt’s anti-Great Depression programs, might well fit in the case of corporate tax policy.  Like the New Deal, a number of acronyms, abbreviations, and other shorthand expressions characterize today’s corporate and business tax policies.  Here is a sample, drawn from recent developments at the state and federal level.