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Iowa lawmakers passed, and Gov. Terry Branstad signed, a measure increasing the state’s gas and diesel taxes by 10 cents this week. The increase will generate about $200 million in new revenue each year that will help cover a shortfall in transportation funding. A recent poll showed Iowans almost evenly split on the measure, though the proportion of those in favor has grown by 19 percentage points since 2011. The increase could go into effect as early as this Sunday and will result in Iowa’s gas tax rate no longer being at its all-time historic low.
Two Illinois legislators recently introduced a measure that would tax high-sugar beverages. The bill, sponsored by State Sen. Mattie Hunter and State Rep. Robyn Gabel, would introduce a penny-per-ounce excise tax on beverages with over 5 grams of sugar per 12 ounces. It would produce $600 million in new revenue each year, to be earmarked toward programs promoting healthy eating and physical activity as well as prevention services in Medicaid. If passed, the measure would be the second tax on sugary drinks in the United States; the city of Berkeley, CA introduced such a tax via a ballot measure last year.
Integrity Florida released a report on corporate tax dodgers this week using ITEP data. They found that Florida taxpayers subsidized the seventeen Fortune 500 companies headquartered in the state, via state government contracts and direct subsidies, to the tune of about $2.5 billion. Meanwhile, these same companies have paid just over $945 million in all state taxes nationwide (including taxes paid to states other than Florida). In fact, even though Florida’s state corporate income tax rate is 5.5 percent (among the lowest in the country), the most profitable Fortune 500 companies have been paying less than half that rate. The report’s authors recommend more transparency around corporate profits and tax payments.
More business owners are taking advantage of a Kansas tax feature than previously predicted, further endangering the state’s fragile revenues. State lawmakers eliminated income taxes for owners of limited-liability corporations and S corporations as a part of Gov. Sam Brownback’s tax plan in 2012. The measure was expected to benefit 191,000 business owners, but 333,000 have since claimed the loophole at a cost to the state of $206.8 million. The governor’s staff, who originally claimed the feature would spur economic growth, says the increase in filers represents new businesses opening shop. Opponents say it’s unfair to exempt business owners from income taxes while requiring their employees to pay income tax, and that the exemption should be discontinued given the state’s $700 million deficit this fiscal year.
Governor’s Budgets Released This Week:
New Jersey Gov. Chris Christie (read here)
Louisiana Gov. Bobby Jindal (read here)