U.S. Could Lose $37 Billion a Year to Tax Havens: Levin

From ABCNews.com:

The U.S. government loses $37 billion per year in tax revenues because multinational corporations stash money in overseas tax havens, Democratic Senator Carl Levin and a group of small businesses said in a report on Tuesday.

Levin, who for years has pushed for a tough law to fight tax evasion among corporations, has enlisted some small businesses to back his so-far unsuccessful proposal to close loopholes letting companies legally avoid taxes by keeping income abroad.

"There are too many small businesses now paying more than their fair share," Levin told reporters on a conference call. "It creates a very unfair competitive situation."

Levin wants to attach some of his proposals to help fund a bill that sets up a $30 billion fund for small business. Levin has tried to attach his initiative to other bills in the past without success.

The coalition of small companies favors banning the use of overseas tax havens, which are generally unavailable to smaller firms.

Tax Foundation: Tax Revenues Fall in 45 States

According to a recent report from The Tax Foundation, state tax revenues fell by nearly 9% in 2009, compared with 2008. There were 45 states that collected less tax revenue, and only five that saw increased tax revenue. Those five states that saw increases are:

1. South Dakota: 0.9%

2. Iowa: 1.3%

3. Oregon: 1.9%

4. North Dakota: 4.3%

5. Wyoming: 13.9%

As you can see, Wyoming was the only state that saw double-digit increases. On the other hand, here are top 10 states with the largest tax revenue declines:

1. Alaska: 51.9%

2. Arizona: 19.7%

3. South Carolina: 16.8%

4. New Mexico: 15.1%

5. California: 15.0%

6. Idaho: 14.1%

7. Virginia: 12.8%

8. Connecticut: 12.1%

9. New Jersey: 11.9%

10. Utah: 11.9%

State Taxes Across U.S. Take Second Consecutive Record Plunge

From the Rockinst.org:

For the second quarter in a row, tax revenues collected by states across the U.S. plummeted sharply in April-June 2009, according to the latest quarterly report on state revenue collections issued today by the Rockefeller Institute of Government.

When compared to the same period one year earlier, second-quarter 2009 tax revenues in the 50 states dropped a record 16.6 percent — the second consecutive quarter in which revenues fell more sharply than during any previous time on record. Forty-nine states saw total tax revenue fall during the quarter, with 36 states reporting double-digit declines.

Tax collections for two major sources of revenue — sales taxes and personal income taxes — declined for the third consecutive quarter. Income tax was down by 27.5 percent, while sales tax was down by 9.5 percent.

US State Budgets Hit by Shrinking Tax Take

From FT.com:

Sharply falling tax revenues across the US have left states facing fresh budget shortfalls and threatening further painful spending and service cuts following previous multiple rounds of belt-tightening.

In the first quarter of the calendar year, tax collections dropped by 11.7 per cent, the largest fall on record, according to the Rockefeller Institute of Government. Of 50 states, some 45 reported declines.

Early figures for April and May show an overall decline of nearly 20 per cent for total taxes, “a further dramatic worsening of fiscal conditions nationwide”, says the institute.

Billions of dollars of federal stimulus funds, combined with cuts to state employee jobs, school districts, healthcare and even the US prison system, have so far failed to close the budget gaps.

“The states are constantly trying to recalibrate their budgets to deal with a shrinking revenue base,” said Susan Urahn, managing director of state policy initiative at the Pew Center on the States.

It raises questions about how deep the decline in services may go, the direction of tax rates, and whether the federal stimulus measures are working.