Marriage Penalties and Bonuses under the Tax Cuts and Jobs Act

• Marriage bonuses can be as high as 21 percent of a couple’s income, and marriage penalties can be as high as 12 percent of a couple’s income.

• While research shows that marriage penalties and bonuses do not have much effect on whether a couple will marry, they do impact how much each spouse works.

• It is possible to completely eliminate both marriage penalties and bonuses, but it would require a significant overhaul of the tax code that drastically changes the current distribution of income taxes paid.

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State and Local Sales Tax Rates 2018

California has the highest state-level sales tax rate, at 7.25 percent. Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. The lowest non-zero, state-level sales tax is in Colorado, which has a rate of 2.9 percent. Five states follow with 4 percent rates: Alabama, Georgia, Hawaii, New […]

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Sales Tax Rates in Major Cities

While a lot of attention is paid to state sales tax rates, many localities impose their own tax, leading to relatively high tax rates in several major U.S. cities.

Last year, Chicago, Illinois, vaulted to the top of the list of cities imposing the highest combined state and local sales tax when a county tax increase brought the total rate to 10.25 percent, a dubious distinction it now shares with Long Beach, California, which reached 10.25 percent on July 1, 2017.

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State Business Tax Climate

California extended income but not sales tax hikes, though local sales tax increases dropped California in the Index’s sales tax component.

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How Much Does Your State Collect in Corporate Income Taxes Per Capita?

Some mistake the corporate income tax as the entirety of a business’s tax burden. However, businesses pay many types of taxes outside of the corporate income tax, including sales tax, property tax, excise tax, payroll tax, and more. The corporate income tax makes up only 9.5 percent of total business taxes.

Today’s map shows how much state governments collect in corporate income taxes per capita. New Hampshire collects the most at $433 per capita, with Delaware shortly behind at $424 per capita. Delaware also levies a gross receipts tax in addition to the corporate income tax. Alaska’s ranking of fifth highest in the country may surprise people, but it is mainly due to a large number of extractive companies and the relatively small population.

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Soda Tax Experiment Failing in Philadelphia Amid Consumer Angst and Revenue Shortfalls

Soda sales in Philadelphia have also declined since the tax went into effect at the beginning of 2017, threatening the long-run sustainability of the tax. According to some local distributors and retailers, sales have declined by nearly 50 percent.[13] This is likely primarily due to higher prices, which discourage purchasing beverages in the city. Some Philadelphia taxpayers took to Twitter as the tax took effect, noting their plans to shop for groceries outside the city.[14] This kind of tax avoidance is only feasible for consumers with means of transportation, making the tax even more regressive. Purchases of beer are also now less expensive than nonalcoholic beverages subject to the tax in the city.[15] Empirical evidence from a 2012 journal article suggests that soda taxes can push consumers to alcohol, meaning it is likely the case that consumers are switching to alcoholic beverages as a result of the tax. The paper, aptly titled From Coke to Coors, further shows that switching from soda to beer increases total caloric intake, even as soda taxes are generally aimed at caloric reduction.

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How High Are Individual Income Tax Collections in Your State?

State and local governments collected an average of $1,070 per person from individual income taxes, but the collection amount varies widely from state to state. New York collected $2,699 per person, the most of any state. Connecticut comes in second at $2,162, with Maryland rounding out the top three at $2,097 collected per person. Arizona collected $515 per person, the least among states with broad-based taxes on wage income. Other states with relatively low collections include Mississippi ($557), Louisiana ($592), and New Mexico ($622). New Hampshire and Tennessee, which tax only interest and dividend income, collected $70 and $37 per person respectively. The seven states that don’t collect individual income taxes predictably reported $0 in per person collections.

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Why Temporary Corporate Income Tax Cuts Won’t Generate Much Growth

There are serious reasons to consider cutting the U.S. corporate income tax. However, many of the best arguments for cutting the corporate income tax apply most strongly to permanent cuts, not temporary ones. A temporary corporate income tax cut is less likely to promote growth and less likely to benefit workers than a permanent corporate income tax cut. A tax reform effort should hope to boost incomes for all, and a corporate income tax cut could be a means to do it. However, a large but short-lived reduction in corporate income taxes may be largely a windfall for investors, pension funds, and retirement accounts, with precious few broader benefits to the economy at large.

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To What Extent Does Your State Rely on Corporate Income Taxes?

Corporate income taxes are one of the smallest sources of state and local tax revenue. On average, only 3.7 percent of state and local tax revenues came from corporate income taxes in fiscal year 2014 (the most recent data available).

Some, however, mistake the corporate income tax as the entirety of a business’s tax burden. In reality, businesses pay many types of taxes (such as sales tax, property tax, excise taxes, and more) and the corporate income tax makes up only 9.5 percent of total business taxes.

The share of revenue from corporate income taxes will decline as more businesses organize as pass-throughs (S-corps, partnerships, sole proprietorships, etc.), which “pass their income through” to their individual tax returns and therefore are liable under the individual income tax code.

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The State-by-State Impact on Jobs and Family Incomes of the House GOP Blueprint

The Blueprint would lead to the creation of roughly 1.7 million new jobs and boost the after-tax incomes of the median household by nearly $5,000. . . California would gain 191,000+ jobs and an estimated gain in after-tax income for median households of $5,536.

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The Business Tax Relief and State-by-State Effects of the House GOP Blueprint

. . . the Blueprint provides a net $1.6 trillion tax cut for American businesses over the next decade, as scored on a static basis. Thus, businesses in every state will benefit substantially.. . California would gain a business net tax relief of $205 billion. . . According to the TAG model, even accounting for the border adjustment, the Blueprint would boost the long-term level of GDP by 9.1 percent, investment by 28 percent, after-tax incomes by an average of 8.7 percent, and create 1.7 million new jobs.

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State Individual Income Tax Rates and Brackets for 2017

Individual income taxes are a major source of state revenue (36 percent of collections).Their prominence is increased by the fact that taxpayers file their individual income taxes directly, unlike the sales tax, for example. For many, the personal income tax is practically synonymous with their own tax burdens.

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Guide to Tax-Related Ballot Questions

Okay, maybe that’s not the biggest draw today. Perhaps that honor belongs to Oregon Measure 97, or Maine Question 2, or Louisiana Amendment 3, or California Proposition 55. But just on the off chance that these aren’t the headlines on the election coverage you’re following, here’s a quick guide to some of the major tax-related ballot issues voters will see today

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Top State Tax Ballot Initiatives to Watch in 2016

On the issue of taxation alone, voters must decide whether to impose a first-in-the-nation carbon tax (Washington), adopt a new income and payroll tax to fund a state public option health care system (Colorado), levy a high-rate gross receipts tax (Oregon), extend temporary income tax increases (California), impose a new high-income surcharge (Maine), legalize and tax marijuana (five states), and hike cigarette taxes (four states), just to name a few of the tax changes on ballots across the country.

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2017 State Business Tax Climate Index

The Tax Foundation’s State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems, and provides a roadmap for improvement.

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