South Hampton Roads Earned Income Tax Credit Coalition

There were several bright spots among retailers reporting January sales and what Super Bowl outcome is preferred by Wall Street. Jim Chesko has those stories and more.

The Super Bowl is a drain on worker productivity. Jim Chesko has that story and more.

There are some fun, new tools to help teach kids about finances ... and we'll tell you about a new beer you might like! Jim Chesko reports.

We're still concerned about our finances, and ... if your cable bill is too high, maybe you can knock it down a bit! Jim Chesko reports.

Our 401(k) plans may be changing for the better ... we continue to buy lots of generic goods ... and why doctors are beginning to monitor patients' moods. Jim Chesko reports.

Thursday's chain-store sales should be pretty interesting ... and a look at a different kind of pension plan for the self-employed. Jim Chesko reports.

We're saving more, but that may not be the best thing for the economy! And, there are some new rules regarding airlines' fees and surcharges. Jim Chesko reports.

There are only a few changes in the tax law filers need to know about this year ... and prices are suddenly dropping at a big department store. Jim Chesko reports.

The housing market's improving, but a lot of deals are still falling through ... and, if you have a problem with a retailer, would you tweet about it? Jim Chesko reports.

Selling a house is still a challenge for homeowners ... and there's a new app that allows you to make free phone calls. Jim Chesko reports.

Gap between Rich and Poor Driven by Business Cycle

Washington, DC, January 30, 2012- Contrary to recent reports suggesting that Bush-era tax cuts have increased income inequality in the U.S., the gap between rich and poor in recent decades has been driven mostly by the business cycle, i.e. multi-year fluctuations in economic activity, according to a new report by the Tax Foundation.

"Inequality generally increases during eras of growth and economic expansion and decreases during recessionary times," said Tax Foundation economist Will McBride. "Changes in tax rates on high-income earners over the last two decades have been incidental to this trend."

Historically, income inequality in the U.S. reached a peak in the 1920s, falling in the decades afterward and eventually rising again in the 1980s and 1990s. This rebound has been attributed to everything from globalization and immigration to the growth of super-star salaries and the computer revolution. All of these factors, however, might better be described as simply the reasonable outcomes of a growing market economy.

The resurgence of inequality in recent decades has also been attributed to tax policy. Based on the most recent IRS data, income inequality has fluctuated considerably since 2000 but is now at about the level it was in 1997. Thus, the Bush-era tax cuts, which had provisions benefitting both high- and low-income taxpayers, did not lead to increased income inequality. By contrast, inequality rose 12% between 1993 and 2000, following two tax rate increases on high-income earners. Thus, changes in inequality over the last two decades appear to be driven more by the business cycle than tax policy.

Levels of inequality can also be made to appear higher than they actually are based on how researchers present the data. The most recently published studies on income inequality use either 2006 or 2007 as their end point, without fully correcting for the business cycle. Since the peak in 2007, personal incomes have collapsed to a degree not seen since the Great Depression. The most dramatic collapse has been in high incomes. Since 2007, for example, the number of millionaires has dropped 40 percent, while income reported by millionaires has dropped in half.

"It is not evident that the Bush tax cuts in either the top marginal rate or capital gains rate had any long term effect on inequality. If anything, they appear to have reduced inequality," said Tax Foundation economist Will McBride. "Therefore, a return to Clinton-era tax rates would not necessarily reduce inequality."

Tax Foundation Fiscal Fact No. 289, "Reversal of the Trend: Income Inequality now Lower than it was Under Clinton" by Will McBride is available online.

The Tax Foundation has monitored fiscal policy at the federal, state and local levels since 1937. To schedule an interview, please contact Richard Morrison, the Tax Foundation's Manager of Communications, at 202-464-5102 or morrison@taxfoundation.org

Consumers continue to feel better about the economy ... plus, some tips to save money on those high-priced movies. Jim Chesko reports.

Fast-food chains want to see you for breakfast ... you can snag some e-books quite cheaply ... and there sure are a lot of choices these days when buying light bulbs! Jim Chesko reports.

A lot of us are very new owners of tablets and e-readers ... and, what can you learn from being fired? Jim Chesko reports.

There's a showdown over "showrooms," and it has Target asking for help from its vendors ... and, with Oscar buzz, maybe a few movies will draw you in. Jim Chesko reports.

We're gradually starting to feel better about our finances ... and we run down a few of the nation's most-expensive restaurants. Jim Chesko reports.

For job hunters, is the paper resume' still relevant? And movie lovers can now debate this year's Academy Award nominees. Jim Chesko reports.

Tax Foundation Releases Rankings on "Business-Friendliness" of State Tax Systems

Washington, DC, January 25, 2012 -- Wyoming, Florida, and Texas rank among the ten best states for taxes on business, while companies in states like New York, New Jersey, and California have a far less pleasant tax climate to deal with, according to a new report by the Tax Foundation.

The State Business Tax Climate Index, now in its 8th edition, accounts for dozens of state tax provisions, creating a single easy-to-use score that measures each state against the tax climates of every other state. Each state's ranking is therefore relative to the actual tax policies in place around the country, not a measurement against a theoretical "perfect" system.

The Index enables business leaders, government policymakers, and taxpayers to gauge how their states' tax systems compare. While some similar studies focus on the total amount residents pay in taxes each year, the Index focuses on how the elements of a state tax system enhance or harm the competitiveness of a state's business environment.

"Even in our global economy, a state's stiffest and most direct competition often comes from other states," said Tax Foundation economist Mark Robyn. "State lawmakers need to be aware of how their states' business climates match up to their immediate neighbors and to other states in their region."

The 10 best states in this year's 2012 Index are Wyoming (#1), South Dakota (#2), Nevada (#3), Alaska (#4), Florida (#5), New Hampshire (#6), Washington (#7), Montana (#8), Texas (#9), and Utah (#10). Many of these states do not have one or more of the major taxes, and thus do not have the associated complexity and distortions.

The 10 lowest ranked, or worst, states in the 2012 Index are Iowa (#41), Maryland (#42), Wisconsin (#43), North Carolina (#44), Minnesota (#45), Rhode Island (#46), Vermont (#47), California (#48), New York (#49), and New Jersey (#50). While New Jersey remained steady compared with 2011, Rhode Island improved by implementing a modest income tax reform. The states in the bottom ten generally have complex, non-neutral taxes with comparatively high rates.

Illinois moved most dramatically in its Index rank over the past year, falling twelve places after a significant income and corporate tax increase. Other states seeing a decline in their ranking include Vermont, which fell four places, while Massachusetts and North Dakota both advanced four places up the chart.

In 2011, the State Business Tax Climate Index was downloaded 487,000 times and cited in hundreds of newspaper articles, editorials, and broadcast media reports. Four governors also cited the Index's findings in their State of the State addresses.

Tax Foundation Background Paper No. 62, "2012 State Business Tax Climate Index" by Mark Robyn is available online.

The Tax Foundation has monitored fiscal policy at the federal, state and local levels since 1937. To schedule an interview, please contact Richard Morrison, the Tax Foundation's Manager of Communications, at 202-464-5102 or morrison@taxfoundation.org.

A housing recovery may finally be taking shape ... gas prices have been creeping higher ... and travelers name the best hotels. Jim Chesko reports.

Home-improvement spending perks up ... and more teens are buying sweatpants and pajamas - and wearing them to school! Jim Chesko reports.