Compromises, Delays, Derivatives and Daze
By Renu Zaretsky :: July 14th, 2014
A highway bill could soon head down Pennsylvania Avenue. The House Rules Committee plans to send to the floor the Ways & Means panel’s short-term highway funding bill today. After a floor vote sometime this week, it’s seen as the likely version to land on the President’s desk. In the Senate, the Finance Committee and the Environment and Public Works panel want to work together to pass a long-term, fully funded transportation bill this year. But chances of getting the House to go along are slim.
Permanent tax breaks will (still) likely wait. The House voted to make permanent the bonus depreciation tax break on Friday, but the current Senate majority’s approach on such “extenders” would make the tax breaks good only through 2015. It is increasingly likely the President won’t see an “extender” bill on his desk till after the mid-term election in November.
Is the Renaissance over? The Senate’s Permanent Subcommittee on Investigations reportedly plans a hearing on July 22 on the trading strategy used by Renaissance Technologies, LLC. Renaissance’s Medallion hedge fund converted profits from rapid trading into lower-taxed, long-term capital gains by using “basket option contracts” with a number of banks: “The profits are just being transmuted, through the alchemy of derivatives, to a preferenced return,” explained TPC’s Steve Rosenthal.
“Alright, alright, alright…” The state of Washington is neither dazed nor confused when it comes to taxing marijuana. It collected nearly $150,000 in excise taxes over its first three days of legal marijuana sales. Excise taxes of 25 percent are levied twice: once when producers sell their product to licensed retail stores, and again when shops sell to consumers. Demand is still outstripping supply. Legal marijuana sales began Tuesday, July 8, and Seattle’s only legal marijuana shop ran out of its product by Thursday, July 10.
Interested in subscribing to The Daily Deduction, the Tax Policy Center summary of the day’s tax news? Sign-up here for free access. If you’d like to tell us about a new research paper or have any comments about our new feature, write us at firstname.lastname@example.org.