No Grand Tax Plans in Obama’s Budget
Obama’s budget due out today will include a number of modest proposals but no major reforms. The president’s fiscal plan will again call for corporate tax reform, and urge that some funds raised by the rewrite be used to pay for new infrastructure. He’s also proposing to extend the Earned Income Tax Credit to childless households, an idea backed by some Republicans as well.
Ryan reviews anti-poverty programs… and likes some tax credits. House Budget Committee chair Paul Ryan released his committee’s report on anti-poverty programs. The effort to “start a conversation” finds many anti-poverty programs to be too costly given their impact. But Ryan talks up the popular Child Tax Credit and EITC, which in his—and plenty of others’—view, encourage work.
Simplification of those credits could save money. TPC’s Elaine Maag proposes a way to save $900 million in administering those credits: Define “child” as under age 19, regardless of student status, for the CTC, EITC, dependent exemption, and head of household filing status. House Ways & Means Committee Chair Dave Camp’s plan, by the way, limits CTC eligibility to age 18 and under.
The State of States and Localities under Camp’s plan is… challenging. TPC’s Norton Francis finds that for many states, costs might rise under Camp’s tax plan. He’d repeal the state and local tax deduction and tax some municipal bonds. On the bright side, Camp’s plan might increase revenues for states that piggyback on the federal income tax by eliminating many deductions and credits, thus raising taxable income for many filers.
More tax cuts in Florida? (A no-income tax state.) Republican Governor Rick Scott wants to cut his state’s taxes, according to his State of the State speech to be delivered today: “Together, we have cut taxes 24 times already … And my hope is that we are about to cut them again … by another $500 million this year,” reports the Tampa Bay Times.
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