Inflation is taking a bite out of sales tax revenues. TPC reports that 26 states collected less sales tax revenue in April compared to the same time last year, while 16 other states reported slower revenue growth compared to 2021. TPC’s Lucy Dadayan warns about the fiscal future: “If wages are not keeping up with inflation, then we will be seeing people spending less… People are going to be a lot more mindful with their money and spend much less on non-necessary, discretionary items, which means we’ll see further weakness in state sales tax revenue.”
California GOP lawmakers ask Gov. Newsom for a gas tax holiday, again. Repeating their request made in March, the lawmakers urged Gov. Gavin Newsom to suspend California’s 51-cent-per-gallon gasoline tax. A gallon now costs an average of $6.31 , with one county reporting a high of $7.29. On Friday, California’s gasoline tax will climb to 53.9 cents per gallon.
How should the US tax oil company profits? Congress is considering many ways to tax high profits being earned by oil companies. TPC’s Thornton Matheson shows how some ideas could generate new revenue without discouraging domestic production while others would be counterproductive. The best solution: Eliminate existing tax subsidies for oil producers and tax only excess profits.
Indiana vaping tax goes into effect on Friday, too. The state will impose a 15 percent retail tax on vape pods and other vaping products starting July 1. Lawmakers lowered the tax on these prefilled e-cigarette cartridges to match the rate on other vaping products. Health experts criticized the rate reduction.
Three brothers face prison and owe nearly $2 million in restitution to the IRS for tax evasion. Over five years, three Minnesota brothers operated a temporary staffing agency but never paid federal employment taxes. By falsifying records and paying workers in cash, they evaded over $1 million in taxes. The three must now pay $1,973,239 in back taxes and penalties and face in-home detention and prison sentences.
Thailand may boost its film industry with a tax break for foreign talent. The government is advancing a plan to exempt foreign actors from its 10 percent withholding tax on all employees working in the country. The exemption would last five years.
The Daily Deduction will publish on Tuesday, July 5, and resume its regular schedule on Monday, July 11, when Congress returns. Happy Fourth of July!
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