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The Small Business Distortion

June 7, 2012

Here’s an important lesson for anyone watching state or federal tax policy debates:  just because elected officials say they’re doing something for “small businesses” and “job growth” doesn’t mean that they really are.

A good example comes from North Carolina, where the legislature last year passed a business tax break that is taking $336 million a year away from public schools, health...

Kansas’ Big and Damaging Tax Cut

May 22, 2012

Kansas Governor Sam Brownback is poised to sign what may be the most fiscally irresponsible and economically damaging piece of legislation to emerge from a state in many years.

The bill is estimated to cut more than $800 million — or 13 percent — per year from the state...

Claims for Oklahoma Tax Cut Not OK

May 17, 2012

Yesterday’s Wall Street Journal editorial supporting a proposal by Oklahoma governor Mary Fallin to phase out the state’s income tax contains a slew of incorrect or misleading statements.  For instance:

  • The editorial wrongly asserts that states without
  • ...

Tax Foundation’s State “Tax Freedom Days” No More Valid than the Federal Version

April 2, 2012

Today the Tax Foundation released its list of when “Tax Freedom Day” allegedly arrives in each state.  It’s a deeply flawed and misleading exercise for a host of reasons.

Each state’s Tax Freedom Day – just like the federal version -- sharply overstates middle-class tax levels.  As my colleagues...

Education Job Losses Finally Ending?

March 9, 2012

After several years of bad employment news in the education sector, today’s jobs report suggests that school districts are starting to hire again.  But, this good news for students, teachers, communities, and the economy comes with several caveats, as I explain below.

3-9-12sfp.jpgNew and newly...

The False Claim That State Income Taxes Impede Growth

February 10, 2012

My list of “dos and don’ts to improve state economies” earlier this week advised states to ignore wild-eyed claims that broad-based tax cuts would strengthen state economies.

The Institute on Taxation and Economic Policy (ITEP) has a new report...

Dos and Don’ts to Improve State Economies

February 8, 2012

Our new guide to state fiscal policies that can create jobs now and prepare states for long-term prosperity has four main recommendations:

  1. Boost revenues and target investments to strengthen the economy. The deep cuts in education, health, human services, and other areas that states have imposed
  2. ...

Local Governments Still a Drag on the Economy

February 3, 2012

Today’s encouraging jobs report would have been even more encouraging if local governments weren’t still...

New GDP Numbers Show Historic Drop in State and Local Spending

January 27, 2012

State and local government spending on goods and services fell at a faster rate — and hence had a bigger negative impact on economic growth — in 2011 than in any year in the last six decades,  Commerce Department data released today show (see graph).

When states and localities cut...

Taking a Pass on “Pass-Through” Income Would Cost Kansas

January 24, 2012

Owners of large corporations, well-heeled law firms, and big investment funds would pay no taxes on millions of dollars in income under Kansas Governor Sam Brownback’s plan to abolish the income tax on business earnings that are “passed through” to owners, rather than taxed at the corporate level.

1-23-12sfp.jpgThe plan would make Kansas the first state in...