2012 July Budget & Tax News

The July issue of Budget & Tax News reports Social Security has an unfunded liability of $8.6 trillion and will run out of money by 2033, three years earlier than projected just one year ago, according to the 2012 annual report of the program’s trustees.

Also in this issue:

• The small town of Dixon, Illinois had a comptroller who managed to steal at least $53 million from the city, according to FBI agents.

• The money-losing United States Postal Service soon may experience significant reforms. The reforms are due to be phased in, ultimately including closure of 3,700 post offices. Senators are resisting reforms, however.

• For some people, a portion of the state personal income taxes deducted from their paychecks doesn’t support public services. The money is going to the employers of those workers as a growing number of states divert income tax revenue to subsidize corporations. Many workers are, in effect, paying taxes to their boss.

• The nine states without personal income taxes are significantly outperforming those with the highest marginal tax rates. The no-income-tax states outperform their high-tax counterparts across the board in gross state product growth, population growth, job growth--and even tax receipt growth.

• Chicago Mayor Rahm Emanuel won City Council approval for his $1.7 billion “infrastructure trust,” a plan to bring in private investors to put up money for improvements to roads, sewers, parks, and other city-owned facilities.

• Georgia is already seeing benefits from a tax reform bill Gov. Nathan Deal (R) signed into law in April to modernize and streamline sales tax exemptions for businesses, particularly the mining, manufacturing, and agricultural industries.