Category Archives: Taxation

Quarterly Summary of State & Local Tax Revenue – Third & Fourth Quarters 2013

Source: U.S. Census Bureau, March 25, 2014

The Quarterly Summary of State and Local Government Tax Revenue provides quarterly estimates of state and local government tax revenue at a national level, as well as detailed tax revenue data for individual states. This quarterly survey has been conducted continuously since 1962. The information contained in this survey is the most current information available on a nationwide basis for government tax collections.

Third and Fourth Quarter 2013 data were released on March 25, 2014.

Beginning with the third quarter of 2013, the Quarterly Survey of Selected Non-property Taxes (F-73) was redesigned. The scope of the survey was streamlined to focus on general sales taxes, personal income taxes, and corporate net income taxes. A new sample was selected.

Table 1 includes only four tax categories: property, general sales taxes, personal income taxes, and corporate net income taxes, as well as TQRRs, Coefficients of Variation, and Margins of Error for each category….

Quarterly Summary of State and Local Government Tax Revenue for 2013:Q4
Source: U.S. Census Bureau, G13-QTAX4, March 25, 2014

Fourth quarter 2013 state and local government tax revenues for property, individual income, corporate income, and general sales showed growth compared to tax revenues for the same quarter of 2012. Total state government revenue was $200.8 billion in the fourth quarter of 2013, up 3.4 percent from the $194.3 billion reported in the same quarter of 2012….

Quarterly Summary of State and Local Government Tax Revenue for 2013:Q3
Source: U.S. Census Bureau, G13-QTAX3, March 25, 2014

Third quarter 2013 state and local government tax revenues for property, individual income, corporate income, and general sales showed growth compared to tax revenues for the same quarter of 2012. Total state government revenue was $194.1 billion, up 5.6 percent from the $183.9 billion reported in the same quarter of 2012….

Corporate Tax Explorer

Source: Citizens for Tax Justice and the Institute on Taxation and Economic Policy, 2014

Welcome to Citizens for Tax Justice and the Institute on Taxation and Economic Policy’s one-stop shop for the state and federal data we analyze on corporate taxes. Just search for a company by name or browse the list of companies below to get detailed information on what the company paid in federal, state and foreign corporate income taxes, as well as information about offshore holdings and various tax breaks.

Enter a Company’s Name and Click on Their Page to See What They Pay….
Related:
Download the Corporate Data (XLS)
(Right-Click and Save-as)

Forces of Divergence – Is surging inequality endemic to capitalism?

Source: John Cassidy, New Yorker, March 31, 2014

….What are the “forces of divergence” that produce enormous riches for some and leave the majority scrabbling to make a decent living? Piketty is clear that there are different factors behind stagnation in the middle and riches at the top. But, during periods of modest economic growth, such as the one that many advanced economies have experienced in recent decades, income tends to shift from labor to capital. Because of enmeshed economic, social, and political pressures, Piketty fears “levels of inequality never before seen.”

To back up his arguments, he provides a trove of data. He and Saez pioneered the construction of simple charts showing the shares of over-all income received by the richest ten per cent, the richest one per cent, and, even, the richest 0.1 per cent. When the data are presented in this way, Piketty notes, it is easy for people to “grasp their position in the contemporary hierarchy (always a useful exercise, particularly when one belongs to the upper centiles of the distribution and tends to forget it, as is often the case with economists).” Anybody who reads the newspaper will be aware that, in the United States, the “one per cent” is taking an ever-larger slice of the economic pie. But did you know that the share of the top income percentile is bigger than it was in South Africa in the nineteen-sixties and about the same as it is in Colombia, another deeply divided society, today? In terms of income generated by work, the level of inequality in the United States is “probably higher than in any other society at any time in the past, anywhere in the world,” Piketty writes…..

….In the United States, the story was less dramatic but broadly similar. The Great Depression wiped out a lot of dynastic wealth, and it also led to a policy revolution. During the nineteen-thirties and forties, Piketty reminds us, Roosevelt raised the top rate of income tax to more than ninety per cent and the tax on large estates to more than seventy per cent. The federal government set minimum wages in many industries, and it encouraged the growth of trade unions. In the decades after the war, it spent heavily on infrastructure, such as interstate highways, which boosted G.D.P. growth. Fearful of spurring public outrage, firms kept the pay of their senior executives in check. Inequality started to rise again only when Margaret Thatcher and Ronald Reagan led a conservative counter-revolution that slashed tax rates on the rich, decimated the unions, and sought to restrain the growth of government expenditures. Politics and income distribution are two sides of the same coin…..

90 Reasons We Need State Corporate Tax Reform – State Corporate Tax Avoidance in the Fortune 500, 2008 to 2012

Source: Robert S. McIntyre, Matthew Gardner, Richard Phillips, Citizens for Tax Justice and the Institute on Taxation and Economic Policy, March 2014

From the summary:
As states struggle with tough budget decisions about funding essential public services, profitable Fortunate 500 companies are paying little or nothing in state income taxes thanks to copious loopholes, lavish giveaways and crafty accounting, a new study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy reveals.

The study, 90 Reasons We Need State Corporate Tax Reform, comes on the heels of a CTJ/ITEP report that found many Fortune 500 companies also pay extraordinarily low or no federal income tax. Many profitable companies also are exploiting state loopholes to avoid paying corporate income taxes, and some are even actively pushing for more state tax breaks.

The state study examined 269 Fortune 500 companies that were profitable every year between 2008 and 2012. Some of the report’s key findings:
– 90 companies paid no state income tax at all in at least one year, and 38 companies avoided taxes in two or more years.
– 10 companies, including Boeing, Merck, Rockwell Automation, paid no state income tax at all over the five-year period covered by the study.
– The average weighted state corporate income tax rate is 6.25 percent, but the 269 companies paid an average rate of just 3.06 percent.
– The companies examined collectively avoided paying $73.1 billion in state corporate income tax.
Related:
Read the Press Release
Company by Company State Income Tax Rates Listed by State Headquarters
Download the Company by Company Data (XLS)(Right-Click and Save-as)

Tax Limitations and Revenue Shifting Strategies in Local Government

Source: Jens Blom-Hansen, Martin Bækgaard, Søren Serritzlew, Public Budgeting & Finance, Vol. 34, Issue 1, Spring 2014
(subscription required)

From the abstract:
The literature on tax and expenditure limitations (TELs) shows how limiting the freedom of local governments to levy taxes may have considerable unexpected effects. Entities subjected to such limitations may, as their proponents hope, react by cutting expenditures and revenue, but they may also strategically change their revenue structure and increase reliance on income sources not subjected to limitations. However, these findings are overwhelmingly based on studies of state and local governments in the United States. Their relevance outside this empirical setting remains unclear. A study of Denmark, where the central government imposed tax limitations on municipalities in 2009, makes two contributions. First, it probes the empirical domain of the U.S. findings. Second, it constitutes an empirical testing ground where endogeneity is not a pressing concern. In the United States, TELs are often self‐imposed either by local legislatures or by citizens through voter initiatives, which may bias the correlation between TELs and tax rates. We analyze a dataset of all Danish municipalities from 2007 to 2011 and demonstrate that TELs do indeed stop taxes from increasing but also confirm the findings from the TEL literature that entities subjected to tax limitations employ revenue‐shifting strategies. In Denmark, however, these strategies are contingent on the specifics of the Danish intergovernmental system, which render central government grants an attractive object of revenue‐shifting strategies. Our analysis thus helps identify the scope conditions of core findings within the literature.

Film Tax Credit Arms Race Continues

Source: Citizens for Tax Justice, March 12, 2014

Tax credits for the film industry are receiving serious attention in at least nine states right now. Alaska’s House Finance Committee cleared a bill this week that would repeal the state’s film tax credit, and Louisiana lawmakers are coming to grips with the significant amount of fraud that’s occurred as a result of their tax credit program. Unfortunately for taxpayers, however, the main trend at the moment is toward expanding film tax credits. North Carolina and Oklahoma are looking at whether to extend their film tax credits, both of which are scheduled to expire this year. And California, Florida, Maryland, Pennsylvania, and Virginia lawmakers are all discussing whether they should increase the number of tax credit dollars being given to filmmakers.

Hunting Lost Revenue in Offshore Tax Havens

Source: Elaine S. Povich, Stateline.org, March 10, 2014

Some states are going after multinational corporations which avoid state taxes by stashing some of their earnings in offshore tax havens, an effort aimed at recouping some of the more than $20 billion states lose to such gimmicks each year. Shifting income to subsidiaries in places like the Cayman Islands or Bermuda, which have minimal or no taxes, allows corporations to avoid U.S. and state taxes on those profits. Congress has been unable to thwart the practice at the federal level, but some states are taking action….

…Montana and Oregon already have laws allowing them to collect those taxes. Montana’s 2004 law is seen as the model; it collected $7.2 million in extra revenue in 2010, the most recent year for which numbers are available. Oregon, which passed its law last year, anticipates an additional $18 million in fiscal 2014-15, according to Bob Estabrook, spokesman for the Oregon Department of Revenue. By the time the two-year budget cycle ends in fiscal 2016-17, Oregon expects to collect an extra $42 million, Estabrook said….

The Economics of Work Schedules Under the New Hours and Employment Taxes

Source: Casey B. Mulligan, National Bureau of Economic Research (NBER), NBER Working Paper No. w19936, February 2014

From the abstract:
Hours, employment, and earnings taxes are economically distinct, and all three are either introduced or expanded by the Affordable Care Act beginning in 2014. The tax wedges push some workers to work more hours per week (for the weeks that they are on a payroll), and others to work less, with an average weekly hours effect that tends to be small and may be in either direction. A conservative estimate of the law’s average employment rate impact is negative two or three percent. The ACA’s tax wedges and ultimately its behavioral effects vary substantially across groups, with the elderly experiencing hardly any new disincentive and unmarried household heads experiencing tax wedges that are about twice the average. My estimates suggest that 3-4 percent of the workforce will work less than the legislated 30-hour threshold solely to avoid the implicit and explicit full-time employment taxes.

Everything is Tax: Evaluating the Structural Transformation of U.S. Policymaking

Source: Susannah Camic Tahk, Harvard Journal of Legislation, Vol. 50 no. 1, September 2013

From the abstract:
In contrast to major legislative reform packages in the 20th century, the Affordable Care Act of 2010 took the form of a tax bill. Although this legislation is the first massive social and regulatory overhaul completed through the tax code, in the past twenty-five years the U.S. Congress and Presidential administrations have substantially increased their use of tax law for non-revenue-raising purposes. Growing reliance on the tax code represents a structural transformation of how Congress and Presidential administrations have come to approach lawmaking goals. This transformation defies the near-consensus of previous tax scholarship, which, following Stanley Surrey, disapproves of embedding programs in the tax code. However, that dominant view rests on assumptions that have become outdated. This Article analyzes the ongoing structural transformation by observing and explaining the advantages that accrue from pursuing social and regulatory objectives through the tax code. In particular, this Article identifies a number of legislative and normative advantages that tax-embedded policies offer.