2012 January Budget & Tax News

The January 2012 issue of Budget & Tax News reports on the looming bankruptcy – or will it be a takeover by the state? – of Harrisburg, capital of Pennsylvania. The city’s finances are a mess, at least in part due to a trash incinerator project that doesn’t pay for itself and the city’s purchase of Wild West artifacts for a museum observers say will never be built.

Also in this issue:

• A partial privatization plan being explored by the North Carolina Zoo in Asheboro could increase donations, enhance attractions, and speed up needed repairs.

• Government pension abuses have prompted some Illinois lawmakers to offer legislation to stop labor leaders from cashing in on taxpayers, following newspaper articles detailing union officials counting work for their unions toward local and state government pensions worth millions of dollars.

• The income earned by the top 1 percent of Americans has declined for the second year in a row while their average tax rate has increased, according to a new study of IRS data.

• Legislators in Kansas are considering taking out a $5 billion loan to cover unfunded liabilities in the state government workers’ pension system. It would be the biggest loan in the state’s history.

• Multibillionaire Warren Buffett has made news calling for higher taxes on the “mega-wealthy,” claiming they pay lower rates than persons with lower incomes. President Barack Obama is proposing a “Buffett rule” to impose a minimum tax on persons who earn more than $1 million, ostensibly to make the tax system fairer. Others say a “flat tax” would be fairer--or a consumption tax. Heartland Institute experts discuss.

• An emphasis on confidence as a cause of economic activity instead of a consequence of economic conditions seems to have prevented policymakers from identifying the role Fed actions were playing in undermining the dollar and restraining liquidity. Those assumptions continue to drive federal policy.