During the economic boom of the 2000s, poverty rates declined in many states. Yet some states were more effective at getting the poverty rate down than others. While there has been much analysis of why some states are more successful than others, what’s been missing is a discussion of the role of entrepreneurs in the process. This paper suggests that economic freedom and entrepreneurship are keys to escaping poverty for many.
During the economic boom of the 2000s, the poverty rate – the percentage of the state population that lives under the federal poverty line – went down in many states. That’s not too surprising – a rising economic tide will usually lift all boats.
It’s like a bad re-run. A few legislators are trying to revive Arizona’s film production tax credit (SB 1170) that lapsed in 2011.
Arizona could be on the verge of strong economic growth. Right now the state House of Representatives is considering HB 2815 which, among other things, phases-out the capital gains tax over four years for assets purchased in 2012 and after. The governor has declared that she is interested in signing a bill that cuts taxes on capital gain income.
It’s often said sequels are never as good as the original film. The same can be said of the recently-proposed multi-media tax credit (SB 1159) that is meant to replace the expired filmmaker tax credit. This sequel is a bad idea. And, in this case, the original was pretty terrible, too.
On March 12, the state senate in Oklahoma passed a bill that would immediately turn the state’s income tax into a flat tax, cut the tax rate in half, and strip away the extraneous tax credits and special carve-outs. Then, over a 10-year period, it would slowly phase the income tax out of existence by cutting the rates each year until they reach zero.
Tax policy is often like looking at a pointillist painting – stare closely at only a section, and you don’t have a sense of the whole picture. But when you back up, the picture comes into a focus.
It’s federal tax day, and many wonder why they owe the government so much money. And those who receive refunds might wonder why the federal government kept so much in the first place.
When policymakers say they have enacted “historic” legislation, they are usually accused of hyperbole. And, in many cases, that is a fair criticism. But in the case of Governor Brewer’s signing of HB 2815, it isn’t a big stretch to say that the action did make one historic move in regard to tax policy. It made Arizona the ninth state in the U.S. to effectively cut its capital gains tax. When the tax cut is phased in completely by 2016, the effective tax rate on capital gains will be 3.4{010c6536f15f83a69f09c4467fdfb4a5656804feab27fe0dec71ed1e80da306f}, instead of the current rate of 4.54{010c6536f15f83a69f09c4467fdfb4a5656804feab27fe0dec71ed1e80da306f}.
Decades of experience have shown us that high taxes dampen economic growth. State policymakers hoping to encourage job growth are right to worry about their state’s tax load on the private sector.
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