Rachael's Public Finance Blog

Anti-Tax Ferver Closed Their Libraries. Now Residents Are Trying to Go It Alone.  In Oregon, an interesting case study has been discussed. Divergent county and municipal ideals have led to different results for public libraries, with many of them closing. Meanwhile, some communities have taken it upon themselves, attempting to break the norms of what was once considered a public assset. On their own, they have gathered volunteers, sought out books, attempted to rebuild library card subscriptions from scratch, and looked for grants. In Douglas County, low taxes have been a part of the area for decades, and so when a property tax increase was suggested in 2016, it was rejected. The community at large didn't value the 11 county libraries enough to pay. The price would've been $6 a month for a median priced home in the county. Since that vote, some communities within the have voted to pay for a town library. Some have relied on volunteers. And not surprisingly, the divisions ...

Jared Kushner Paid No Federal Income Tax for Years, Documents Suggest Tax avoidance can take many different forms. In this case, it appears as though Kushner used a common method to avoid his federal taxes - reporting the depreciation of real estate assets. This "loss" is actually a bending of an assumption in the law. The law assumes that buildings depreciate over time, as assets acquire wear. However, many appreciate in value due to the nature of real estate. As a result, one can have buildings appreciating in the market, but can follow the law's assumptions of depreciation to report these "losses." The administration had recently revised tax laws to encourage such benefits to real estate investors - a move that should surprise no one. Another loophole used by developers such as Kushner include avoiding the capital gains taxes. This is done by selling their properties, but using the proceeds to purchase new properties, as long as its done within a certain ...

Some States Sitting on Piles of Cash, and Cities Want a Cut Last year, 17 states had budget surpluses, and 39 reported them in recent years. However, the state's financial security has gone toward padding the coffers of rainy day funds, instead of investing in resources for struggling municipalities. Some cities, like Lorain, in Ohio, are in such a critical state that they have abandoned some buildings instead of repeating maintenance. While the saving is largely a lesson from recent recessions, the article mentions that the decision about what to do can often fall along political boundaries, with Democrats pushing to spend, and Republicans tending to save. An example of this can be seen in California, a more liberal state, which has used much of its surpluses for maintenance, homelessness, and other issues. It's hard to say what the right answer is when facing an uncertain future. But most problems are more expensive to fix the longer that you wait, so stashing every penny...

Want to hurt NC public schools? Cut the income tax cap. In November, NC will vote on whether it should reduce the income tax cap from 10% to 7%. The article, written by Leah Abrams, argues that doing so will damage the public education system within the state. A third of the money from the current income taxes goes directly to schools. One of the critical issues with the state income tax, according to Abrams, is that it's one of only 6 statewide flat-tax rates- as most of the country uses income brackets to determine the rate. The low state rate of 5.5 is decidedly regressive. I agree with her analysis, that the reduction in taxes will cause disparities in education, and could harm communities that are already dealing with issues of inequality due to wealthy neighbors. I also agree that the flat tax indeed becomes regressive, as the wealthiest people end up with the same tax rate as the poorest. A statewide cap drop from 10 to 7 means that local communities would not be a...