We all love to complain about taxes (and for good reason), but in the spirit of Thanksgiving, we would like to suggest a different way of thinking about taxes—just for one day, that is.
We'll defer to two writers who said it better than we could:
♦ "A person doesn't know how much he has to be thankful for until he has to pay taxes on it."
— Author Unknown♦ "The only thing that hurts more than paying an income tax is not having to pay an income tax."
— Lord Thomas Robert Dewar
The complaining will recommence the day after Thanksgiving.
For tax year 2008, the personal exemption amount will be $3,500. For 2007, the amount was $3,400. Taxpayers can claim an exemption for themselves and for each dependent.... Continue Reading:
Back in October, we reported on Mary Bach, a Pennsylvania woman who sued K-Mart because her $3.99 toilet paper purchase was incorrectly taxed (for 28 cents). The Associated Press reports that Ms. Bach won her lawsuit, and under Pennsylvania's consumer protection law, K-Mart must pay $100 (357 times Ms. Bach's actual damages).
Recovering illegally collected taxes is certainly laudable, but K-Mart seems caught between a rock and a hard place, as we previously noted:
Some 7,400 jurisdictions in the United States impose a sales tax, and most if not all of those taxes carve out exemptions and exceptions for politically-favored products. Keeping track of what's taxed and what's not in 7,400+ tax codes is a tough job, and if you mess up, you face fines and lawsuits.
For instance, the following items are among those exempt from Pennsylvania's sales tax: wrapping paper, toothbrushes, coal, coffins, horses (but only if shipped out-of-state or used for commercial racing), three kinds of trout (out of twenty), gum, tourist promotional materials, and toilet paper.
With so many exemptions and deductions in our tax code, the real news story should be when someone gets it right, not when they get it wrong. Businesses small and large can suffer as they try to keep up with the ever-changing mess.
More blog posts on sales taxes here.
A number of state legislators and governors have recently considered selling or leasing their state-run lotteries for a quick influx of cash. One of the most publicized lottery "privatization" plans was crafted in Indiana, although it was never implemented. Now Governor Mitch Daniels has announced that he is abandoning this plan.
Indiana Governor Mitch Daniels said today he won't make a renewed pitch in the upcoming legislative session for his proposal to privatize the Hoosier Lottery, saying lawmakers will be too busy considering property tax reforms.
During the last session, Daniels proposed leasing the lottery to a private operator and said one company was willing to pay $1 billion plus $200 million in annual payments for the 30-year lease.
The money it generated would have gone toward a life sciences fund and a scholarship program for college students who stay in-state after graduating.
A version of his plan passed the Republican-dominated Senate. But he withdrew the proposal days before the session ended in April after it stalled in the Democratic-controlled House.
If Daniels had originally proposed selling the lottery outright rather than leasing it, and thereby getting the state out of the lottery business entirely, we would be disappointed to see him drop this plan. However, since the plan was simply to lease the Hoosier Lottery, which would have kept the state in the lottery business—a business it should not be part of in the first place—dropping the plan is not such a bad idea.
State-run lotteries are a source of implicit tax revenue, and they are the epitome of poor tax policy: they are regressive, they lack transparency, they are not economically neutral, and they are often sold to voters with promises of significantly increased education funding—promises that are generally not kept.
If Indiana needs more revenue, it should look to explicit taxes, not to the state lottery.
Click here for more on state-run lotteries.
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