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Federal Finance Issues that Affect the States Sam Rosen-Amy August 2014
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Federal Spending in the States Main Types of Federal Spending in the States Grants Contracts Salaries and wages Direct payments Retirement Non-Retirement
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Federal Spending in the States FY 2010 outlays relative to state GDP Source: Pew analysis of the U.S. Census Bureau’s Consolidated Federal Funds Report data. 36% 12% National AAverage
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Federal Grants as Share of States’ Revenues FY 2012 Source: Pew analysis of the U.S. Census Bureau’s Annual Survey of State Government Finances data.
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Federal Grants as a Percentage of State Revenues 1961-2012 Source: Pew analysis of the U.S. Census Bureau’s Annual Survey of State Government Finances data. 35.4%
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Federal Grants to States Over Time Total Budget Authority, Adjusted for Inflation Base FY 2008 Source: Pew analysis of Federal Funds Information for States data. 18% Recession
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Trends in Federal Grants to States Change in FY 2008 to FY 2014 Total Budget Authority, Adjusted for Inflation Source: Pew analysis of Federal Funds Information for States data.
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Mark Robyn August 2014 Federal – State Tax Connections
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Economic impact Federal-State Tax Connections Statutory links between state and federal tax codes Assistance through the federal tax code
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Economic impact Federal-State Tax Connections Statutory links between state and federal tax codes Assistance through the federal tax code
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Conformity Simplicity Compliance Ease of administration Revenue Uncertainty Pros Cons
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Conformity: Starting Points
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Conformity: Types of Provisions Deductions Credits e.g.: Earned Income Tax Credit e.g.: Child Care Credit e.g.: Itemized Deductions
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Economic impact Federal-State Tax Connections Statutory links between state and federal tax codes Assistance through the federal tax code
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Federal Support to States Through the Tax Code Federal deduction for state and local taxes paid Federal exclusion of interest on state and local bonds Reduced taxes by $45 billion Reduced taxes by $26 billion
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Economic impact Federal-State Tax Connections Statutory links between state and federal tax codes Assistance through the federal tax code
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Geographic Distribution: Mortgage Interest Deduction Average deduction per tax filer, by state, 2011
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pewtrusts.org/fiscal-federalism
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