International tax reform bites the dust. The last shred of hope that this Congress could enact international tax reform faded when House Ways & Means Committee chair Paul Ryan conceded that talks with Democratic Senator Chuck Schumer to tie the initiative to the highway bill have failed. With Ryan bowing to the inevitable, Congress will now try to agree on a three-year funding scheme, using a mix of some spending hikes and some small revenue-raisers. If that fails, look for an even-shorter fix.
This week on the Hill. Congress has just a few weeks left to agree on raising the debt limit. The Treasury Department estimates it will run out of borrowing authority around November 5. Of negotiations, President Obama has indicated “It's not that complicated. The math is the math.” Meanwhile, Ways & Means will hold a hearing on Wednesday to examine the tax policy implications of higher education costs. On Friday, the House Budget Committee will mark up a reconciliation package that would repeal the Affordable Care Act's healthcare tax provisions.
Should big box stores get a big property tax cut? Local governments in Michigan are crying “foul” over the ability of retailers like Lowe’s and Home Depot to successfully appeal property tax assessments. The stores win reduced assessments thanks to the "dark store" theory: Since big box retailers wouldn't sell stores to other retailers unless they had closed those locations, assessments should be based on the value of vacant property. Democratic and Republican lawmakers have introduced bills to stop the practice.
How can the IRS improve EITC eligibility verification? Determining who counts as a “qualifying child” in families applying for the Earned Income Tax Credit isn’t easy for the IRS. Could eligibility be verified using data from other assistance programs, like food stamps? TPC’s Elaine Maag and colleagues looked at Florida’s Supplemental Nutrition Assistance Program (SNAP) but found that enrollee information is neither detailed enough nor of high enough quality. A better option: Congress could simplify EITC’s “qualifying child” rules.
In the United Kingdom, tax credit cuts in spite of resistance. Prime Minister David Cameron’s own party questioned their necessity, but Cameron says cutting earned income tax credits is the correct path, and that changes ultimately will “come with higher pay and lower taxes.” Three million low-wage workers will learn how much their credits will decrease just before Christmas. One think tank estimates that over a million households will lose an average of £1,350 a year.
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The “Cadillac tax” has a loyal pit crew. A bipartisan group of 101 economists and health experts have co-signed a letter urging Congress to retain the tax on high-cost health insurance plans. A bipartisan group of lawmakers is moving to kill the Affordable Care Act levy, which is scheduled to take effect in 2018. Backers […]
Donald Trump says he’d eliminate the tax break on carried interest. What he doesn’t say is he’d give the investment managers who now benefit from that scheme an even bigger tax cut than they get today. And, it turns out, Trump’s new tax regime would not only benefit hedge fund managers, but also millions of […]
On the Hill… The Senate and House passed funding bills to keep the government open through December 11, with just the usual minutes to spare. Now that that’s taken care of, the Senate Finance Committee holds a hearing today on improper payments in federal programs. Comptroller General of the United States Gene Dodaro will testify. […]
By Renu Zaretsky :: September 30th, 2015
About that possible government shutdown… The Senate passed a continuing resolution to fund the government through December 11. Senate Majority Leader Mitch McConnell and outgoing Speaker of the House John Boehner will meet with President Obama “soon” for budget negotiations, and the House is on track to approve a short-term spending bill, too. Now Congress […]
By Renu Zaretsky :: September 29th, 2015
Donald Trump unveiled his tax plan—is it going to “cost him a fortune?” He has a tax cut for nearly everybody, but the highest income households would likely be the biggest beneficiaries. And his plan would likely add trillions to the national debt over the next decade, concludes TPC’s Howard Gleckman. But while Trump details […]
Donald Trump, who likes superlatives, has weighed in with his version of a standard cut-the-rates, broaden-the-base tax reform. And like many other GOP tax rewrite proposals, this one appears to be an enormous tax cut skewed largely in favor of high-income households. While Trump claims the plan would pay for itself after three years, he […]
By Renu Zaretsky :: September 28th, 2015
Speaker of the House John Boehner resigns. His resignation—in the wake of a conservative effort to overthrow him—increases the chances that Congress will fund the government at current levels through December 11 and avoid a shutdown this week. The Senate plans to approve a 10-week continuing resolution today. The biq question is what happens next: […]
State policymakers are increasingly using “triggers” to pass big tax cuts while ducking tough decisions on how to pay for them. They are bad tax policy. Naturally, they are incredibly popular. Here’s how a tax trigger works: A state cuts taxes over a period of years. There may be an initial tax cut that takes […]
By Renu Zaretsky :: September 25th, 2015
Next week on the Hill… Maybe a shutdown, maybe not, and also a couple of Senate Finance Committee hearings. On Tuesday, the panel will hold a hearing on Puerto Rico’s debt crisis. On Thursday, it will consider improper payments made through federal programs including Medicare, Medicaid, and the Earned Income Tax Credit. On the campaign […]