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Accounting: Push On To Extend $8,000 Homebuyer Credit

Publication Date: 
October 26, 2009
Source: 
North Bay Business Journal
Author: 
Jenna V. Loceff:

Professor Joseph Bankman is mentioned as part of a group of experts on tax policy who support sales tax reform, but are opposed to adopting the business net receipt tax:

More than 160 members of Congress have signed a letter to Speaker of the House Nancy Pelosi and Minority Leader John Boehner requesting that the $8,000 homebuyer tax credit be extended.

“Since the tax credit was expanded in February,” the Oct. 21 letter reads, “we have seen house sales rise and glimpses of price stabilization. From April through July, we saw three straight months of rising prices of homes. The number of home sales rose 11 percent from May to June, the largest gain in eight years.”

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In a letter to Mr. Parsky, Joseph Bankman, Stanford Law School; Arnold Harberger, UCLA Economics Department; Walter Hellerstein, University of Georgia School of Law; James Hines Jr., University of Michigan Economics Department; Charles McLure, Hoover Institution/Stanford University; Steven Sheffrin, U.C. Davis Economics Department; Kirk Stark, UCLA School of Law; John Swain, University of Arizona College of Law; and George Zodrow, Rice University Economics Department said, “The most advisable course of action at this stage would be to recommend several key reforms” to the sales tax.

“Our concerns regarding the BNRT arise primarily from the numerous uncertainties relating to administration, compliance, legal challenges and economic distortions of such a tax.”

They said that while the business net receipts tax is an intriguing proposal, there are numerous reasons to believe it is the wrong way to go.

“Rather than recommending the BNRT, we believe the commission should endorse three key reforms” to the sales tax: “extension of the tax to cover selected retail services; exemption for business purchases, subject to provisions to prevent avoidance for non-business purchases; and continued efforts to include cross-border retail purchases in the tax base to the extent allowable under federal law.”