Supreme Court Strikes Down Double Taxation System
May 19, 2015
The Supreme Court struck down a part of Maryland’s income-tax system that allowed for the double taxation of residents who receive out-of-state income.
• The Supreme Court struck down a part of Maryland’s income-tax system that allowed for the double taxation of residents who receive out-of-state income. The court’s rejection of the rule, which was initially designed to promote in-state economic activity over transactions that cross state lines, is estimated to reduce tax collections by about $42 million annually and cost the state more than $200 million in retroactive refunds. [WSJ]
• The World Trade Organization declared on Monday that U.S. country-of-origin labeling (COOL) requirements for meat products in which producers are required to indicate on retail packaging where each animal was born, raised, and slaughtered violate global trade laws. The ruling has significant impact on U.S. trade with its North American neighbors Canada and Mexico, both of which claim to be adversely affected by the labeling requirements, with the potential for $2 billion in retaliatory trade actions from those countries should Congress not repeal the COOL requirement. Canada and Mexico, America’s first and third largest trading partners, respectively, engaged in $658 billion and $534 billion in total bilateral trade with the U.S. last year. [Bloomberg]
Economic Indicators & News
• New residential construction in April jumped to a higher-than-expected annual rate of 1.135 million units, a gain of 20.2% over the previous month, while permits surged 10.1% to a yearly pace of 1.143 million. Single-family housing starts increased 16.7% to 0.733 million and multi-family units gained 27.2% on the month to reach 0.402 million. Privately owned housing completions rose 14.4% to 0.986 million. The pace of new residential construction is the strongest in the Northeast, followed by the South and West with negative growth in the Midwest. [Census]
• The trade surplus in the Eurozone was 45.3% higher than the year-ago period in April, as it increased to $26.2 billion due to an 11% increase in exports with only a 7% gain in imports. The region’s current account is being adversely impacted by the European Central Bank’s ongoing stimulative quantitative easing that will weaken the currency by increasing the supply of euros through September 2016. Core inflation, however, was unchanged from the year-ago period at 0.6%. [Eurostat]