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Bathtub Redux

Jul 18, 2008
Our July 2, 2008, piece, entitled “Bathtub Logic,” showed how the neo-cons at the federal level were trying to extend their tax-cutting obsession by undercutting the taxing prerogative of states and localities. The same group that brought us that news, The Center on Budget and Policy Priorities (CBPP), now warns us of another such ploy currently being pursued in both houses of Congress. The “Business Activity Tax Simplification Act (BATSA)” (Senate Bill S. 1726; House Bill H.R. 5267) would deprive the states of significant corporate taxes which they now levy on businesses which are based out-of-state but do business within their borders.

Corporations which are not physically based in a state nevertheless have such a significant presence—employees conducting business, inventories stored in third-party warehouses, etc.—that they are subject to current laws which grant states and localities the right to tax a fair share of their profits and assess other levies. BATSA will eliminate many of those rights, costing the states up to $3 billion annually within a year or two of its enactment.1 The shortfall will have to be made up somehow, with the burden falling, naturally, on the increasingly burdened, increasingly vanishing, middle class.

And really, now, the “Tax Simplification Act”? Doncha love the spin they put on these things, even—especially—in the names they give them?
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1Congressional Budget Office estimate, 2006.
tags: Taxes

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