July 6, 2010
July 6, 2010
Tax increases on oil companies, soda pop, income and parcels failed in June.
By Oregon Tax News,
Oil tax loses in Congress
At the federal level, Senator Bernie Sanders, an Independent Senator from Vermont, led the unsuccessful Congressional effort to pass legislation to repeal oil tax breaks. Senator Sanders argued that big oil companies make billions in profits and do not deserve the tax breaks at a time when the nation faces a record-breaking $13 trillion in national debt and an unsustainable federal deficit. The successful opponents to the legislation argued that removing the breaks for oil and gas drilling would hurt small producers as well as big oil companies.
Income tax fails in New Jersey
Democrats in the New Jersey State Legislature failed to override Republican Governor Chris Christie’s veto of the proposed tax increase on individual annual incomes above $1 million. The 47 to 33 vote did not give Democrats the two-thirds majority needed to override the bill. The proposal would have tapped an additional $600 million out of New Jersey’s economy by increasing the income tax rate by nearly 2 percent (8.97 percent to 10.75 percent) on the state’s 16,000 highest wage earners. Senate President Stephen Sweeney and other Democrats supported the bill because they planned to use the money for seniors and the disabled, and restore property tax rebates. However, opponents to the bill successfully argued the tax would stifle economic activity and growth and chase residents from New Jersey to more tax-friendly states.
Soda tax fails in Maryland
In Maryland, a proposed $11 million tax on bottled beverages, including beer and soft drinks, failed in the Baltimore City Council. Baltimore’s Mayor Stephanie Rawlings-Blake proposed the tax as a means to help close a $121 million budget gap. If passed, the proposed bottle tax would combine with existing state and local sales taxes to increase the price charged on bottled beverages. A four-cent per container tax would increase the cost of a 30-pack of beer $1.20. Opponents argued that the tax would heavily burden convenience stores, restaurants, and other small businesses, because beverages make up a significant portion of their sales. The tax failed by one vote.
Parcel tax fails in L.A.
The Los Angeles Unified School District faces difficult budget cuts after residents defeated its proposed parcel tax on the primary ballot. Measure E sought a $100-per-parcel tax that would provide $92.5 million annually for four years, easing some of the pain from next year’s budget crisis. The district hoped to rely on the parents of nearly 618,000 students. However, a lackluster campaign with little advertising could not bring out the desired numbers. Officials must now cut arts programs in half in elementary schools and eliminate library aides to deal with the $640-million deficit. These cuts will come amidst the already crowded high school classrooms and increasing anticipated layoffs.
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