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Here's stuff I read about sales tax policy

  • Blog Post by: Adam Belz
  • February 8, 2013 - 12:28 PM
I just filed a general story about Dayton's sales tax proposal. Should be in the paper Friday.
 
Here are some links on the tax and tax policy in general:
 
- The Minnesota Department of Revenue put together an informational sheet on which new services will be taxed under the plan, and how much revenue each category will generate. It's here.
 
- Florida's legislature famously extended its state sales tax to professional services in 1987. The tax was repealed six months after it went into effect. Walter Hellerstein, a tax expert at the University of Georgia Law School who helped draft the law, wrote an account of what happened for the National Tax Journal. It's clearly written.
 
- This article on the distributional fairness of sales tax, which I'm sure you're dying to read, shows that sales tax on services is slightly less regressive** than sales tax on commodities. It includes a nice summary of what happened when Florida gave itself a sales tax on business inputs: “a tax on business inputs has a very substantial direct impact on a small number of politically astute and sophisticated taxpayers.” 
 
- Tourists on the islands carry a heavier burden of the sales tax, because of tax pyramiding in Hawaii. It's got the broadest sales tax on services of any state. The General Excise Tax functions just like a sales tax and it happens to work for Hawaii because the place is isolated and highly dependent on tourism. 
 
- Something on the way sales taxes distort business inputs.
 
- Recent Hawaii state tax commission report.
 
- This article from the Florida State University Law Review has a good discussion of the cascading effect of a sales tax on business-to-business services.
 
**regressive is a technical term for a tax that falls more heavily on the poor in proportion to their income

 

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