TaxVox Fruit, Pizza, Roads, Short-term Fixes and Shifts
Renu Zaretsky
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A tax break on the vine is worth none in the bush? TPC’s Howard Gleckman describes yet another stupid tax trick in his latest post. A provision for some fruit and nut growers was slipped into a bill restoring extra tax breaks for business investment. The goodie, also examined in depth by Marc Heller of BNA, is an example “of government picking winners and losers, even to the point of providing economic advantage to one fruit over another.” In this case, grapes would get a tax break blueberries would not. The House could consider the bill this week. Wisconsin’s take-and-bake pizzas will be taxed. Last year, the Badger State asked the Streamlined Sales Tax Governing Board whether it was OK to tax Papa Murphy’s pies, which you buy in the store but bake at home. The board made its decision in May: Take-and-bake pizzas are prepared food and subject to sales tax. It is up to each state whether to levy the tax. Wisconsin will go with its gut, so to speak, and tax the item at 5 percent. It could collect at least $2.7 million a year. Summertime in “Pure Michigan” means some bumpy rides. The Michigan legislature adjourned for much of the summer without passing a billion dollar gasoline tax hike to fund state road improvements. Instead, it allocated $271 million in general funds for roads. Meanwhile, the private sector and state have invested about $12.6 million in tourism marketing this summer to build on the $18.7 billion tourists spent last year. The promotions are unlikely to say much about the potholes. A big telephone tax hike will fund Chicago’s public pensions, at least for a little while. Illinois and Chicago put off addressing the city’s $20 billion pension crisis until after November’s gubernatorial election and February’s municipal elections, thanks to a 56 percent increase in Chicago’s telephone tax. The increase won out over a hike in property taxes—which, after the elections, may have nowhere to go but “up.” The property tax burden has shifted in Ohio. Since 2005, lawmakers have significantly reduced property taxes on utilities and businesses, leaving homeowners and famers with a larger share of the property tax burden to support schools. In 1991, Ohio homeowners and farmers paid 47.5 percent of the nearly $4.4 billion collected in property taxes funding schools. In 2011, they paid 70 percent of the $8.75 billion collected. At the same time, Ohio income-tax cuts are reducing the state tax base while funding for schools remains below 2010 levels. Interested in subscribing to The Daily Deduction, the Tax Policy Center summary of the day’s tax news? Sign-up here for free access. If you’d like to tell us about a new research paper or have any comments about our new feature, write us at [email protected].
Tags bonus depreciation gasoline tax prepared food property tax public pension sales tax transportation