2013 October Budget & Tax News

Issue Date: 
October, 2013
Newspaper PDF: 

President Barack Obama proposed to Republicans a “grand bargain” on taxes that he said would spur jobs and income growth, especially for lower- and middle-income Americans. But early responses to his late July speech, including from groups that have been loyal Obama backers, indicate the grand bargain could be a big bust.

Also in this issue:

  • The Internet Tax Freedom Act of 1998 placed a moratorium on state and local taxation of Internet access and on discriminatory taxes on emails and other electronic data. The moratorium is set to expire in 2014 but some members of Congress are proposing to make it permanent.
  • Most states impose sales tax only on transactions that involve tangible personal property such as cars or computers. Many states do not impose sales taxes on services or intangible property. Digital goods, which fall in between many of the older definitions of taxable and not taxable, have created disagreement over whether they are tangible personal property or intangible property. Most states have declared most software to be a tangible product and therefore subject to sales tax. States are now classifying digital products and taking very different approaches.
  • Does New Mexico really need people to have two years of experience and take two exams before they can repair a door? Or two years of training to install a security alarm? New Mexico is one of many states hindering job growth by imposing burdensome requirements on people before they may enter an occupation.
  • Researchers are expressing skepticism toward Federal Communications Commission reforms that attempt to end waste in a federal phone subsidy program. Before the 2011 reforms, federal subsidies provided up to nearly $24,000 per year per phone line in certain high-income areas, including the island of Maui in Hawaii, Colorado resorts, and gated communities in Arizona. The subsidies have been going to approximately one-half of 1 percent of the nation’s households. Maximum subsidies per line are smaller now but still far more than the actual costs to provide phone service.
  • Soon after the city of Detroit filed for bankruptcy, many blogs and news sites began running “facts” about the city. One “fact” repeated often was that “the size of the police force in Detroit has been cut by about 40 percent over the past decade.” Yet major inconsistencies in the city’s own reports show no one really knows how many cops have been let go.
  • While refusing to take responsibility for more than $100 billion in unfunded pension and retiree health care obligations, California legislators spent the legislative session coming up with new ways to extract money from their constituents. According to recent research by the California Taxpayers Association, California legislators have introduced approximately $11 billion in tax increases and new or higher fees.

Newspaper Articles in this Issue