Daily Deduction

from the Tax Policy Center

Must Everything Old Be New Again?

By :: April 2nd, 2014

Wyden’s extenders bill is set for a vote tomorrow. Senate Finance Committee Chair Ron Wyden  and senior Republican  Orrin Hatch introduced the EXPIRE Act (“Expiring Provisions Improvement Reform and Efficiency Act”) yesterday. The committee will consider it on Thursday. The measure would kill a few of the expired tax subsidies but restore most through 2015. The Joint Committee on Taxation calculates the measure would add $67.4 billion to the deficit over 10 years.

Camp’s retirement and prospects for tax reform. House Ways & Means chair Dave Camp deserves thanks for crafting a serious, detailed and transparent tax reform plan, as TPC’s Howard Gleckman reminds readers. But will anyone pick up the bat and ball after Camp heads for the dugout?

How about the House Budget Committee Chair? Contender for the Ways & Means chairmanship Paul Ryan (R-WI) unveiled “The Path to Prosperity: A Responsible, Balanced Budget” yesterday. Tax reform takes up about 2.5 percent of the document, and the fiscal plan merely calls for a tax code that is simple, fair, and more competitive. That sort of generic call for reform is the fiscal equivalent of standing at home plate and never even swinging. As TPC’s Howard Gleckman writes, it’s understandable given the current state of GOP politics, but it’s still disappointing.

What’s the prognosis for the U.S. corporate income tax? Not good, but TPC’s Eric Toder and the American Enterprise Institute’s Alan Viard will present two possible treatments on April 4. “Major Surgery Needed: A Call for Structural Reform of the Corporate Income Tax,” a conference cosponsored by The American Enterprise Institute and TPC, will also give Marty Sullivan of Tax Analysts and Pam Olson of PricewaterhouseCoopers an opportunity to discuss the strengths and weaknesses of both options. Register to attend here.

EPA may open the door to state carbon taxes. The Environmental Protection Agency may propose a rule in June that would make it possible for states to impose carbon taxes on manufacturers and other firms that burn fossil fuels. Adele Morris of the Brookings Institution thinks it could be a win-win for states and much more efficient than old-style regulation.      

How does minimum-wage income vary across states? The TPC’s latest Tax Facts offers “A Comparison of State Minimum Wages.” There’s variation, to be sure, but the District of Columbia’s plus 21 states’ minimum wage is higher than the federal minimum of $7.25. And “of the 74 million employees paid an hourly wage in 2011, 3.8 million, or 5.2 percent, were paid the federal minimum or less.”

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  1. Michael Bindner  ::  2:27 am on April 3rd, 2014:

    The Wyden-Hatch bill has toys for both sides. This increases the likelihood it will pass the House on Suspension of the rules. Howard wrote couple of essays – although unless a President pitches the Congress won’t bat – and this House won’t even play ball with this President (or Camp). Obama won’t play either, because he already got the Run he wanted with the ATRA. That Ryan gives us partisan drivel is not surprise – those who believe in a merciful God can’t see him getting Ways and Means, excpept as Ranking Member and Gadfly. He can only get away with the budget he proposes now because the last budget was for two years. As for Corporate Tax Reform, it cannot be done without individual reform, which reaches non-corporate employers. The only way to hit bot is a Value Added Tax and abandonning taxing profit seperately for all but very wealthy individuals. EPA’s state based carbon tax might work – although whether it should is an open question – if states cut income taxes on the wealthy to offset a carbon tax, it is a bad idea. It will also cause an air war with the Koch Bros (which has actually started already). The TPC minimum wage report is encouraging and depressing (as I live in Virginia, which has no state minimum wage – and I work at such a job).

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