Three interesting posts from the tax policy world this week:

First, Josh Lehner of the Oregon Office of Economic Analysis writes about the difficulty of measuring wealth and forecasting any related tax revenues. For example, revenue forecasters don’t know exactly how much wealth is out there, and they don’t know when estate taxes and capital gains taxes will be paid.

Lehner writes,

While there is considerable fluctuations in estate taxes, capital gains are even more volatile. There are myriad factors at play including when a taxpayer chooses to realize gains based on their value, or the taxpayers need for income to pay the bills. That said, the hardest component here when it comes to capital gains is the fact we do not have good information on what the cost basis for these gains actually is. Is the gain based on an asset (a stock, or business, or house) that was purchased recently, or one that was bought decades ago and which there are considerable unrealized gains?

The answer to this question is a known unknown, it varies tremendously by taxpayer . . . .

Lehner also notes,

. . . in large part due to the volatility of estate taxes and capital gains, Oregon policymakers during the 2017 legislative session, passed Senate Bill 1566 which will direct some of these revenues — when they are above their 10 year growth trend — to help with the PERS unfunded liability.

We’ve written previously about the volatility of capital gains taxes (see here and here). Gov. Inslee has proposed a capital gains tax as part of his 2019–21 budget package.

Second, Howard Gleckman of the Tax Policy Center lists the 10 worst tax ideas of the year. They include Seattle’s attempt to levy a head tax on large employers, the ballot initiatives in Washington and Oregon to ban taxes on groceries, the bill proposed by Sen. Bernie Sanders that would “tax firms to cover the cost of the federal benefits their low-wage workers receive,” and President Trump’s idea that “tariffs are good for the US economy.”

Third, Jared Walczak of the Tax Foundation writes about state tax trends. These include:

• Remote Sales Tax Collection Regimes. Washington already has a remote sales taxation law, but it may need to make changes to conform with the U.S. Supreme Court decision in Wayfair v. South Dakota. (Gov. Inslee’s budget proposal assumes such changes.)
• Revival of Business Head Taxes. “2017 came along and suddenly head taxes were back in vogue, kicked off by a proposal for a $500 per-employee ‘business head tax’ on large businesses in Seattle, Washington, home of Amazon and other major technology companies.”
• Gross Receipts Tax Consideration. “Just over a decade ago, gross receipts taxes appeared to be on the verge of extinction,with the antiquated form of taxation persisting (at the state level) only in Delaware and Washington. In recent years, however, several states have turned to this highly nonneutral tax, chiefly as an alternative to volatile corporate income taxes.”