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Shifting from Income to Sales Taxes Won’t Boost State Economies

April 29, 2015

Governors in Maine and Ohio want to shift their states’ revenue mix away from income taxes and toward sales taxes by cutting the former and raising the latter, arguing that will boost economic growth.  But these proposals would do more harm...

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Case for “Single Sales Factor” Tax Cut Now Much Weaker

April 1, 2015

Lawmakers in North Carolina, North Dakota, and Tennessee are considering a costly corporate tax giveaway in hopes of attracting or retaining manufacturing jobs.  But a new study casts serious doubt on the research that has long served as the main justification for this tax break.

Called the “single sales factor formula,” the tax break enables multistate corporations to pay income taxes...

Making State and Local Tax Breaks for Businesses More Transparent

February 9, 2015

State and local tax breaks to encourage certain activities, like saving for college or locating a business in a specific neighborhood, have become very costly and deserve as much scrutiny as government spending.  But, for the public, identifying these so-called “tax expenditures” can be difficult, and finding out their cost is...

Why Money Doesn’t Walk

October 20, 2014

We’ve shown that interstate differences in tax levels have little effect on whether and where people move, contrary to claims by some tax-cut proponents.  The related claim — that people who leave a state take their incomes with them, harming that state’s economy — isn’t true either, our...

More Evidence That State Income Taxes Have Little Impact on Interstate Migration

August 26, 2014

The New York Times’ Upshot blog has published a fascinating set of graphs of Census Bureau data on interstate migration patterns since 1900, bolstering our argument...

Congress Shouldn’t Renew Internet Tax Freedom Act Unless It’s Paired With the Marketplace Fairness Act

July 21, 2014

The Internet Tax Freedom Act’s (ITFA) ban on state and local sales taxation of monthly Internet access fees costs state and local governments about $6.5 billion annually in forgone revenue, and the states and localities currently taxing access under ITFA’s “grandfather” provision would lose at least $500 million on top of that...

Busting Three Myths About the Internet Tax Freedom Act’s “Grandfather Clause”

July 18, 2014

The Senate next week will likely consider its version of a bill to renew the Internet Tax Freedom Act (ITFA), a federal law prohibiting state and local governments from taxing the monthly Internet access subscription fee that households and businesses pay.  The House voted earlier this week to make ITFA, which is due to expire on November 1, permanent.

ITFA was enacted...

Mazerov on the Risks of Permanently Banning Sales Taxes on Internet Access Charges

July 14, 2014

Writing today in The Hill, I explain why policymakers should reject an effort to permanently bar states from applying their normal sales taxes to the monthly charges that households and businesses pay for Internet access.  Such a permanent ban, which the House...

No Justification for Permanently Banning Sales Taxes on Internet Access Charges

July 11, 2014

For the first time since Congress enacted the Internet Tax Freedom Act (ITFA) in 1998, lawmakers are seriously considering permanently extending the moratorium on new state and local sales taxes on Internet access service and eliminating the “grandfather clause” exempting existing taxes — changes that could cost states $7 billion a year in potential annual revenue.  Our...

Congress Should End, Not Extend, Prohibition on Taxing Internet Access

June 18, 2014

The House Judiciary Committee will likely approve a bill today to make permanent the Internet Tax Freedom Act (ITFA), which bans discriminatory and multiple taxation of Internet purchases and imposes a moratorium on new state and local taxes on Internet access services.  Rather than make ITFA permanent, Congress should extend its ban on discriminatory and multiple taxes for a few years but...