Last week, the Texas Legislature voted on a transportation funding bill that would raise an estimated $1.2 billion annually to help pay for highway improvements. Technically, it doesn’t raise new revenues but rather diverts half of oil and gas severance tax revenues from the state’s Rainy Day Fund to the highway department. Contingent on voter approval and scheduled for the November 2014 ballot, this bill hardly meets the $4 billion annual shortfall the highway department currently faces. The Institute on Taxation and Economic Policy (ITEP) has shown that an equitable and sustainable way to pay for transportation is to modernize the state gas tax by increasing rates to meet current demand and then peg them to rise with transportation construction costs.
Between 2003 and 2012 the average Hollywood movie earned a 452 (!) percent return on investment. Still, 40-some states offer generous film tax credits in a misguided effort to invite productions. While we have shown these subsidies are mostly false promises, last week the Los Angeles Times illustrated another way in which they are wasteful – this time with the All-American Jackie Robinson story “42.” Collecting millions of dollars in tax subsidies from several states including Georgia, Alabama, and Tennessee, “42’s” producers proudly touted their patriotism and dedication to promoting the communities in which they filmed… only to turn around and conduct a significant component of their post-production work abroad, including recording the musical score in London. While some conclude this means the tax credit should be expanded to include post-production, all that would do is hasten the race-to-the bottom of tax incentives.
Last week, New York Governor Andrew Cuomo announced an unusual plan that would allow the state to suspend the driver’s license of about 16,000 taxpayers who owe more than $10,000 in state taxes. While overdue tax bills amount to $1.1 billion, the program is expected to bring in just $26 million in uncollected income taxes this fiscal year and $6 million in following years. Delinquent taxpayers are defined as individuals who have unpaid income taxes and businesses with unpaid sales tax bills.