CSG Midwest
At least 20 states, including five in the Midwest (see map), have enacted taxes on the “streaming” of media, such as music, movies or TV shows.
CSG Midwest
As some leading lawmakers in Washington, D.C., explore potential changes to the federal tax code, one idea in particular — the creation of a border adjustment tax — is likely to get more and more attention from many Midwest-based firms.
CSG Midwest
Since its inception in the 1970s, the federal Earned Income Tax Credit (EITC) has enjoyed wide bipartisan support. Designed to encourage and reward work, a low-wage worker’s EITC grows with each additional dollar of earnings until his or her wages reach a maximum value — an incentive for people to leave welfare for work and for low-wage employees to increase their work hours.
And the EITC is refundable: If the amount of the credit exceeds what the worker owes, he or she gets a refund.
“For conservatives, the EITC is pro-work, it is pro-personal responsibility. Liberals like that too, but also it is directed toward low-income people, so you get that mix,” says Chuck Marr, director of federal tax policy for the Center on Budget and Policy Priorities. “Plus, it works. There is very rigorous research to show that it encourages more work.”
According to the IRS, the 42-year-old Earned Income Tax Credit is one of the nation’s largest anti-poverty programs. In tax year 2015, for example:
  • More than 27 million filers received about $67 billion in earned income tax credits. 
  • Four of five people eligible for the EITC claimed it.
  • The EITC and the separate Child Tax Credit lifted an estimated 9.4 million people out of poverty, including 5 million children. 
In the 11-state Midwest, more than 4.6 million federal EITC claims for tax year 2015 provided almost $11.2 billion in credits. The average refund was $2,343. (The maximum federal credit in 2016 ranged from $506 for a childless individual to $6,269 for a family with three or more children.)
CSG Midwest
In 2015, lawmakers in North Dakota passed legislation (SB 2057) requiring the legislature to undertake an evaluation of 21 of the state’s tax incentive programs at least once every six years. According to Pew’s Business Incentives Initiative, North Dakota is one of 21 states (four in the Midwest; see map at right) that have passed laws since 2012 requiring regular evaluations of tax incentive programs offered by the state.
CSG Midwest
Two state legislatures in the Midwest took actions this past year to encourage private investments in affordable housing. In late 2016, Illinois Gov. Bruce Rauner signed a law (SB 2921) extending a tax-incentive program that has been in place since 2011. It provides a 50-cent tax credit for every dollar donated to a not-for-profit group that is working to create or preserve housing for low-income residents. Since its inception, Illinois officials say, the tax credit has leveraged more than $370 million in private investment and helped create or preserve over 18,000 affordable housing units.
Nebraska’s LB 884 was signed into law in April 2016.

There are not many questions of public policy that economists widely agree upon. The benefits of free trade, negative impacts of rent controls, and the infeasibility of returning to a gold standard, are a few.  Add to that list the use of tax-exempt municipal bonds to subsidize the construction of professional sports complexes, a practice that 85% of surveyed economists disagree with.

Econ Piggy

In 2016, shoppers in 17 states will have the opportunity to purchase certain items free of sales tax on what are known as sales tax holidays. Widely popular with consumers, sales tax holidays are often pitched as a win-win for everyone; spurring further local economic growth while giving taxpayers’ pocketbooks some much needed relief. Recent findings, however, suggest that these holidays are often ineffective fiscal tools.

In March 2015, U.S. Supreme Court Justice Anthony Kennedy wrote a concurring opinion for Direct Marketing Association v. Brohl stating that the “legal system should find an appropriate case for this Court to re-examine Quill.” Two lawsuits out of South Dakota and Alabama might be exactly the case Kennedy had in mind. 

In the last month, legislation to eliminate the so-called “tampon tax” has been passed in New York, Connecticut and Illinois. The push to exempt tampons, pads, and other feminine hygiene products from state sales taxes has come amid criticism that the tax unfairly affects women. Supporters argue that menstrual products should be treated like other medical necessities, which are currently tax exempt in most states.

San Francisco startup Airbnb is a vital part of what’s known as the sharing economy as it connects property owners with travelers seeking unique travel accommodations. As some states find themselves in budgetary binds, looking to Airbnb and similar businesses for additional revenue may prove a popular option. As of July 1, 2016, ten states require Airbnb to collect and remit applicable state lodging and sales taxes.

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