President Obama released a $4.1 trillion budget yesterday. TPC’s Howard Gleckman says the plan includes about $3 trillion in tax hikes over ten years, mostly to pay for new initiatives. These taxes include a $10 per barrel oil tax, a 19 percent minimum tax on future corporate income earned abroad, a 14 percent one-time levy on past income not yet repatriated back to the US, a fee on highly-leveraged financial institutions, a “Buffett tax” on millionaires, and a cap on the value of deductions and other tax preferences at 28 percent. As expected, the GOP swiftly called it “dead on arrival.”
In the President’s budget: A loophole closes to raise more for the ACA. Brookings Institution’s David Wessel, in his Wall Street Journal blog (paywall), explains. To help pay for the Affordable Care Act, Congress and the President passed the Net Investment Income Tax for couples with incomes over $250,00 and individuals with incomes over $100,000. The tax applies to interest, dividends, royalties and “income derived from a trade or business in which the taxpayer does not materially participate.” Smart tax accountants could help assure taxpayers were in fact “active” participants and avoid the tax—they just had to create partnerships, limited liability corporations or S-corporations The President’s budget, however, would tax nearly all trade or business income, irrespective of their structure. That could raise $272 billion over 10 years.
The Senate may take up an Internet tax ban this week. Majority Leader Mitch McConnell predicts the chamber may debate a permanent extension of the federal ban on state and local taxes on Internet service. The measure, which already passed the House, is stuck on a customs bill.
Also on the Hill today… Treasury Secretary Jack Lew and IRS Commissioner John Koskinen discuss the federal budget with the Senate Finance Committee.
Aiming lower: John Kasich. The GOP presidential candidate says he’s open to lowering the corporate tax rate below his proposed 25 percent. Kasich also proposes three brackets for personal income taxes, with the top rate at 28 percent. And he'd reduce the capital gains and dividends tax to 10 percent. Did his flexibility contribute to his second-place finish in New Hampshire?
Now the feds are unhappy with Liberty Tax Services franchises in South Carolina. The Justice Department would like to close three shops in Columbia, South Carolina. According to the civil suit filed by Justice, the franchises filed false federal income tax returns in order boost their customers’ refunds.
As for California and its tax on health insurance plans… The state legislature is trying to sort out the mess over how to replace a tax that applies to managed care organizations that serve state’s Medicaid program, Medi-Cal. The bill, which is expected to be considered by committees this week, shifts around some taxes to allow California to continue receiving federal matching funds for Medi-Cal.
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If the White House wanted to attract attention to its final budget, it could not have picked a worse day to make it public. With official Washington obsessed with today’s New Hampshire primary, the 2017 budget barely caused a ripple. In case there was any question about its fate on Capitol Hill, congressional Republicans had […]
For some: A new sign-up period for the Affordable Care Act. People who received tax credits to subsidize their ACA coverage in 2014 were supposed to file returns that year to make sure their credit was the right amount. If they didn’t file, they would be ineligible for future credits starting this year. But because […]
By Len Burman :: February 8th, 2016
In the budget he plans to release tomorrow, President Obama will propose some modest changes to the Affordable Care Act’s much-reviled Cadillac Tax on high-cost employer sponsored health plans. In advance of the proposal, Jason Furman, Chair of the president’s Council of Economic Advisers, published a full-throated endorsement of the levy. While the tax has […]
The President’s budget will be out tomorrow. Will anyone notice? There is almost always something perfunctory about the last budget of an outgoing president, but this year’s will generate even less interest than usual. In the ultimate insult, the GOP-run congressional budget committees won’t even invite White House officials to describe their fiscal plan. There […]
Last night’s debate was… an actual debate. Moderators barely spoke and Democratic candidates Hillary Clinton and Bernie Sanders explored (and tussled over, at times) a variety of issues… except for their tax plans. Maybe next time. The President releases his final budget next week, and would like a new tax on oil. He wants to boost […]
There’s a Democratic debate tonight. It will now feature only two candidates. Brush up on Hillary Clinton’s and Bernie Sanders’ tax plans here. Clinton and Sanders have agreed to four more debates. The next one will be in Flint, Michigan, a city currently in a state-manufactured water crisis. Senate Finance Committee Democrats would like an […]
A couple of weeks ago I donated six cases of water to our neighbors in Flint, Michigan. I’m not alone. In an outpouring of love and solidarity for a city that’s been stuck with poisoned tap water for two years, average Americans and big-name celebrities from across the country have donated millions of bottles of […]
Some Oregon Democrats propose an alternative state corporate tax hike. They want to raise an additional $1 billion from business over the next two-year budget cycle to fund public education and cut personal income taxes. Their bill would replace the state’s corporate income tax with a commercial activity tax of 0.39 percent on a business’s […]
Call it the perils of one-off corporate tax settlements. While the developed world is trying—with limited success– to figure out how to tax multinational corporations, individual countries are making their own deals to collect back taxes with those firms. It is not a pretty sight. Last week, the UK reached a $187 million settlement with […]