A Ditch, an Add, and Maybe an End Run
By Renu Zaretsky :: July 18th, 2014
Australia repeals its two-year-old carbon tax. It’s been a contentious issue for seven years. Australia is one of the biggest producers of carbon emissions per capita. Its government is committed to reducing emissions to 5 percent below year 2000 levels by 2020. A carbon tax might have been the most expedient method to accomplish that goal but Prime Minister Tony Abbott prefers a taxpayer-financed AU$2.55 billion incentive fund for companies that use cleaner energy.
The House voted to add another $16.2 billion to the deficit over ten years. This time, it passed a bill to make permanent several new charitable tax breaks and lengthen the tax year for individuals' charitable contributions. The measure would also modify the excise tax on private foundations’ investment income.
The Senate wants to bypass the Finance Committee on internet taxation. The Internet Tax Freedom Act, banning states and localities from taxing internet access, passed the House this week. The Marketplace Fairness Act, designed to allow states to collect sales tax from internet retailers, passed the Senate last year. Illinois Democrat Senator Dick Durbin would like to combine the two bills in the Senate to send to the House. But Senate Finance Committee Chair Ron Wyden is against blending the two bills.
Could the rush to inversions sink tax reform? The hottest new M&A trend is corporate inversions that allow US firms to cut their tax bills by acquiring a foreign company. But as more high-tax firms vote with their feet, pressure for corporate tax reform could fade, says TPC’s Howard Gleckman.
On the Hill next week: The Senate may vote for the House-passed, ten-month Highway Trust Fund patch. The Senate’s Permanent Subcommittee on Investigations will examine how some hedge funds used derivatives to turn short-term capital gains into lower-taxed long-term gains. The Senate Finance Committee will discuss international taxation, including perhaps the latest push for quick action on corporate inversions. The Finance panel’s Subcommittee on Taxation and IRS Oversight will review the ABLE Act, which would allow individuals with disabilities or their families to open tax-sheltered savings accounts to pay for certain long-term expenses. The House Ways & Means Subcommittee on Oversight will hear from the GAO on the “integrity of the administration of the Affordable Care Act’s premium tax credit.”
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