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from NewsLink, Vol. 3, No. 2, Winter 1999
Who really pays the taxes
Thanks in large part to the new $400-a-child tax credit, nearly 48 million Americans will pay zero income taxes for 1998, according to a Congressional study. At the same time, the Joint Committee on Taxation estimated that people at the higher end of the income spectrum — above $100,000 a year — will shoulder 62% of the 1998 income tax burden, compared with 56% the year before. The 47.8 million Americans who owe no income taxes represent more than a third of those required to file.
Associated Press, December 15, 1998.What they need is a charitable tax credit
Research by the Urban Institute indicates there are hundreds of faith-based organizations in every metropolitan area, run by churches, synagogues and mosques. Besides emergency food and clothing, they provide tutoring and computer training, maintain city parks, supervise delinquents released on probation, give mortgage counseling, rehabilitate houses, offer day care, and run health clinics. Taken together, they constitute a “critical mass” that may be capable of explosive expansion — though no one is quite sure how to trigger it.
David Boldt, Knight Ridder Newspapers, November 1998.
One way to resolve disharmony
France and Germany think that low overall corporate tax rates, not just specific incentives, could count as unfair competition. In Brussels, French Finance Minister Dominque Strauss-Kahn said that fixing corporate tax rates was “the whole idea” behind tax harmonization. France and Germany, with their expensive welfare states, are loathe to cut corporate taxes to the low levels of countries like Ireland, so they want the Irish to raise theirs.
The Economist, December 5, 1998.
The tax bite, bigger than ever
A simple look at the budget math shows that taxes are taking an unprecedented share of income growth. In the past year, higher personal income taxes (not counting Social Security) have consumed 34% of the growth in personal income, nearly twice the share intended by the administration in its record-setting 1993 tax increase… In the past three years the share of household income taken by personal income tax has risen by 2.4 percentage points. Therefore, it could be argued that 80% of the drop in the saving rate over that period is due to a bigger tax take. A 10% tax cut would restore a bit over half of this take, while providing both the U.S. and the world with some dearly needed economic insurance.
Lawrence Lindsey, Wall Street Journal, December 9, 1998.
Another dubious Massachusetts distinction
Last year at this time, a national analysis of income and charitable giving ranked Massachusetts 49th in the nation, ostensibly making residents of the Bay State the second most selfish people in the country. No longer. The new Chronicle of Philanthropy ‘’Generosity Index,’’ shows that Massachusetts has slipped one spot, and now ranks dead last. That means Massachusetts has the third-highest percentage of wealthy people - those making more than $100,000 per year - but ranks 43d in per capita giving, the greatest discrepancy in the country.
Allis Valdes-Rodriguez, Boston Globe, October 25, 1998.
Ah, yes, Cambridge
Cambridge has long been a hot spot for rising young companies and major corporations alike. But the high tech and biotech firms hunting for office space in the city across the Charles River may soon have something else to ponder: a sweeping new initiative that could force some companies to organize carpools and install showers for employees who prefer to bike to work.
Scott Van Voorhis, Boston Business Journal, February 5, 1999.
NewsLink is the quarterly newsletter of the Beacon Hill Institute for Public Policy Research at Suffolk University. © 1996-2003. All rights reserved.
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