Senate Republicans have stalled the tax extenders bill on a procedural vote. The debate isn’t over. Senate Republicans were not pleased that Democrats blocked their amendments to the bill and, in response, blocked a vote. Republicans wanted to repeal the Affordable Care Act’s medical device excise tax and strike the wind production tax credit. Senate Majority Leader Reid (NV) filed cloture on Wednesday and the Senate will try again...sometime.
But bridge spending for highways advanced out of Committee. The Senate Environment and Public Works passed a six-year transportation bill on a bipartisan vote. The bill would keep federal spending at current levels but it does not address the Highway Trust Fund’s looming shortfall. The Fund has been financed by the federal gasoline tax, unchanged for over 20 years and diminishing as a source of revenue, given Americans’ changing driving habits and more fuel-efficient cars. The gasoline tax covers only $35 billion of the $53 billion in federal highway and mass transit spending.
Is your tax bill still your tax bill if somebody else pays it? After Endo International, a US drug manufacturer, switched to an Irish address, the company’s executives faced a $60 million tax penalty aimed at discouraging executives from reincorporating their companies in tax havens. Endo will pay those executives’ bills, contributing to its first quarter loss of $437 million.
Senator Levin is fed up with inversions. The Michigan Democrat will introduce a bill this week to limit the ability of US companies to reduce their US taxes by merging with foreign firms and changing their corporate address. He’d like to see a moratorium on such mergers. Senate Finance Committee Chair Ron Wyden also plans to address the issue: His legislation would be retroactive to May 8. Neither effort, however, is expected to get very far. Senator Orrin Hatch, the top Finance panel Republican, would rather see broader reform to solve the “root problem” of poorly designed corporate taxes. TPC’s Howard Gleckman wonders whether multinational corporations are tired of waiting.
A correction: A faithful reader points out an inaccuracy in yesterday’s item on student loans. We reported that a Pew Foundation study found the “median loan is equal to about two years’ worth of household income.” The item should have read that the “median student debtor has total loans equal to about two years’ worth of household income — loans that include mortgage, vehicle, and credit card debt, on top of student debt.”
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