The GOP may be close to a budget deal. The Hill reports that House and Senate negotiators may be close to a deal on a budget resolution. Congress needs to complete final action on spending bills before October 1 when it faces the return of the sequester and a $1.017 trillion cap on military and domestic discretionary spending.
Could there be “A Better Deal for Maine?” The state’s Democratic leaders say “yes” and have begun sharing their tax reform plan with Maine voters. While GOP Governor Paul LePage wants to increase the state sales tax from 5.5 percent to 6.5 percent and reduce the income tax rate from 7.95 percent to 5.75 percent, Democrats would leave the sales tax rate unchanged, lower property taxes, and direct income tax relief to the bottom 95 percent of earners.
Pennsylvania could be close to a property tax deal. Democratic Governor Tom Wolf and the state’s House Republicans are working on a deal, but obstacles remain in their continued effort to lower school property taxes. The Governor would raise the sales tax from 6 to 6.6 percent and expand it. Republicans would boost it to 7 percent but keep current exemptions. Both parties would increase the state income tax from 3.07 percent to 3.7 percent. Republicans want the Governor to use new tax revenue only for property tax relief. Both sides want to block school districts from raising taxes after a state tax cut.
Philadelphia shows some brotherly love on higher property taxes. A group of organized labor and civic and other business associations are “prepared to pay more to make our city grow.” They back a plan to change the city's property tax structure. They’d boost the commercial and industrial property tax rate by 15 percent but lower wage taxes and the net-income portion of the business income and receipts tax. Backers estimate that the change could add 50,000 to 100,000 jobs in 10 years and generate $42 million in new revenue for schools over the first five years. State legislators must agree to put the changes on a ballot measure.
And in the world’s largest democracy, the vast majority pays no individual income tax. In India, the average worker earns about $5,000 (80,000 rupees) a year. But the income tax floor is more than three times that amount (250,000 rupees). About a third of the $220 billion India collected in taxes last fiscal year came from corporations. While most Indians pay no income tax, they do pay other levies including sales tax.
Could a carbon tax buy-down corporate tax rates? TPC does the math. The other day, Rep. John Delaney (D-MD) proposed using a carbon tax to pay for corporate tax rate cuts while allocating some of the extra dough to help offset the regressive nature of the energy levy. TPC's Howard Gleckman looks at a paper by colleagues Eric Toder and Donald Marron and finds the numbers could work. But the politics would still be a heavy lift.
On the Hill next week. The Senate Finance Committee holds a rescheduled hearing next Tuesday on audits and appeals issues in Medicare. The Senate Committee on Small Business and Entrepreneurship holds a hearing Wednesday on the Supreme Court’s King v. Burwell case on Affordable Care Act tax subsidies and how Congress could protect small business and employees if the justices overturn the law.
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