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election

Election Day was last week, right?

Yet, a week and a half later, we’re still waiting for outcomes in at least two Senate races. And in the “anything can happen” category, voters in San Jose still don’t know the outcome of the vote to increase sales tax to increase regional transit to the city.

Votes are still being counted for the proposal to increase the sales tax by one-eighth-cent to bring Bay Area Regional Transit (BART) to San Jose. The increase would be in place for 30 years but would not be collected until an agreement for additional funding is reached with the federal government, thought to be a few years out.

Proponents of the measure had given up hope, but now with more than 600,000 votes counted, the measure has the exact number of votes that it needs to pass – for now. There are still nearly 10,000 votes to go… an overwhelming majority of those need to be “yes” votes for the measure to pass. Expect those votes to be tallied any day now. Votes must be counted and certified by Dec 2.

The turnabout is rather overwhelming. A week ago, with 164,000 ballots remaining, opponents of the measure claimed victory. However, most of the uncounted ballots, which were absentee and provisional ballots, were “yes” votes, changing the picture completely.

The late “yes” votes are thought to represent younger voters who tend to be in favor of increasing mass transit. Absentee ballots and provisional ballots are not uncommon among younger voters, who may be in college or graduate school.

If the trend continues, the measure may pass after all, capping off a wild election season. It just goes to show that it ain’t over till it’s over…

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It was a historic day on yesterday with the election of President Elect Barack Obama. It’s almost easy to forget that there were other elections and ballot issues to consider but voters in some states faced a laundry list of issues. Among those were several state tax measures, including:

In Arkansas: Voters supported an amendment to the Arkansas Constitution which, among things, eliminated a reference to the poll tax.

In Colorado: Voters said no on several tax measures, including a state sales tax increase. Amendment 58, which would end a property tax credit for Colorado’s oil and gas industry and boost severance tax revenue by $321 million a year – seven companies, including Chevron and Conoco each contributed $1 million towards the opposition campaign. Severance taxes are imposed on minerals extracted from the state, or “severed,” to compensate for nonrenewable resources.

In Florida: Voters defeated Amendment 8, which would have authorized counties to ask voters if they want to increase the sales tax for up to five years to aid the local community college. Voters approved Amendment 4, which would give conserved property a lower tax assessment; the amendment also eliminates property taxes on lands placed in a perpetual conservation easement.

In Louisiana: Voters said no to a bill that would dedicate additional state severance taxes to parishes (like counties) of origin (See Colorado above).

In Maine: Voters approved a measure vetoing a new tax on beer, wine and soft drinks, which would help finance a state health care program.

In Massachusetts: Voters rejected another measure that would have cut, and then eliminated, the state’s personal income tax. A similar measure was rejected in 2002.

In North Dakota: Voters rejected an income tax cut. Measure 2 would have cut income taxes in half and corporate income taxes by 15%.

In Nevada: Voters shot down an attempt by the Nevada Legislature to amend or repeal the sales and use tax without voter approval.

In Oklahoma: Voters overwhelmingly approved an exemption from personal property tax for injured veterans and veterans’ surviving spouses. Voters also approved a measure that would require a person or business to file an application in order to receive a property tax exemption.

In Oregon: Voters said yes to an exemption that required 50% voter turnout to pass property tax increase measures. Voters turned down a measure that would have allowed federal taxes paid to be deducted from Oregon taxable income.

(Note: Findings were based on local newspaper and media reports. If you have additional information, please share!)

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It’s all over the web: freebies for voters! Starbucks, Ben and Jerry’s and Krispy Kreme and other companies announced earlier in the week that they would be offering freebies for voters. This is good, right?

Nope, say some pundits. They claim that offering freebies a violation of federal law, citing section 42 USC 1973i(c).

Really? A violation of federal law? I’m not a constitutional lawyer but I think this is a bit over the top. I believe the law is meant to discourage voters from accepting gifts or money in exchange for “the vote” – to prevent “vote buying” or bribery. I don’t think this rises to that level.

The actual statute reads as follows:

Whoever knowingly or willfully gives false information as to his name, address or period of residence in the voting district for the purpose of establishing his eligibility to register or vote, or conspires with another individual for the purpose of encouraging his false registration to vote or illegal voting, or pays or offers to pay or accepts payment either for registration to vote or for voting shall be fined not more than $10,000 or imprisoned not more than five years, or both: Provided, however, That this provision shall be applicable only to general, special, or primary elections held solely or in part for the purpose of selecting or electing any candidate for the office of President, Vice President, presidential elector, Member of the United States Senate, Member of the United States House of Representatives, Delegate from the District of Columbia, Guam, or the Virgin Islands, or Resident Commissioner of the Commonwealth of Puerto Rico.

So, no buying votes! No bribing anyone! No paying people to vote! Got it?

Is this what the free coffee and doughnuts are about? I don’t think so. I’ve seen the Starbucks video about the free coffee. And I believe it’s merely a thank you to voters and not an inducement to vote. I think it’s like the free cookies that you get after donating blood – it’s not a payment in exchange for the donation but a thank you for doing so.

From a tax perspective, when you accept an item or money in exchange for goods or services, it’s not a gift, it’s income – even when you break the law. Money or items accepted in exchange for vote bribery or vote buying would be taxable. Why is it income? The simplified version is that you’re being induced into doing something – working, buying, selling, etc. – in exchange for getting something.

Is that the case here? I don’t think there’s an actual inducement. In fact, there is no actual requirement to show proof of voting to get the “freebie.” It’s on the honor system. If the giveaways were meant to produce a specific result, there’s not even any proof that it happened. What kind of “bribe” is that?

But companies are taking no chances in light of the concerns about voter fraud, offering freebies to all who ask and not just those who voted. Starbucks spokeswoman Diana Fullerton has said:

To ensure we are in compliance with election law, we are extending our offer to all customers who request a tall brewed coffee

. So free stuff for everybody!

Even without the offer to extend the freebies to all, it seems to me that this is a case of much ado about nothing. Put another way: do you think that voters are making up their minds to vote (or not) based on the lure of a free cup of coffee or a doughnut? I say no. I enjoyed my free cup of Starbucks coffee today but I would have voted anyway, coffee or no coffee.

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I’ve received a flurry of last minute emails about me about the differences between the presidential candidates’ tax strategies. I don’t have anything new to add (though look for more political blogging later tonight) but I did want to point you to some prior taxgirl posts on the candidates and their economic and tax policies:

  • Ask the taxgirl: How much will Obama’s tax plan cost me?
  • Debate? What Debate?
  • How Much Does it Cost to Keep America Healthy?
  • Comparisons of Obama and McCain Tax Proposals
  • Who Wants to Raise Taxes? Bueller…? Bueller…?
  • Fix the Tax Code Friday: Presidential Economic Plans

    Be informed. And vote!

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  • God And Taxes, Redux – And Not What You’re Expecting

    24 September 2008

    For years, the GOP has been viewed as having a lock on the link between God and politics – and I am not claiming that to be a good thing.
    But maybe that’s changing – and I am not claiming that to be a good thing, either.
    Senator and Vice Presidential hopeful Joe Biden recently announced that [...]

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    How much money do you need to make to be President?

    18 April 2008

    Democratic presidential candidate Barack Obama has released his tax return for the 2007 tax year showing that together with his wife, the Obamas earned $4.2 million. A whopping $4 million of that income was in the form of royalties from the sale of his books. Other income includes Obama’s Senate salary of $157,102 [...]

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    Has Obama Changed the Race?

    19 March 2008

    If you had asked me, before today, what the single most important issue would be in the upcoming presidential election, I would have said the economy, hands down. For purposes of the election, it’s more important to voters than Iraq, than health care, than the environment (though clearly those issues are intertwined with the [...]

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    Read My Lips.

    16 May 2007

    Thanks to all of the presidential candidates who have weighed in on my tax policy questions – each of the candidates was asked to reply to the same six questions. I’ve really enjoyed speaking with the candidates and their aides and am very impressed by the thoughtfulness that seems to have gone into a [...]

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    Election Season Starts Early for IRS

    5 June 2006

    As reported previously, the IRS will be stepping up efforts to curb election year campaign activities from nonprofit organizations following a particularly active 2004 election season that saw all manner of controversy ranging from targeting church speeches to the infamous Swift boat ads.
    The IRS released a statement reminding charitable organizations that, as a rule, they [...]

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