Congress may unveil a $1.1 trillion spending bill as well as a tax extender package today. The latest deadline for federal funding expires tomorrow and Congress will likely have to stretch it out for a few more days. House Speaker Ryan promises to give lawmakers enough time—three days—to read through the bill. Whatever they do, Congress looks like it is ready to leave town at the end of the week.
The telecom industry wants a permanent ban on Internet access taxation. Three telecom groups wrote Congress to say the ban’s “Expiration would likely increase the cost of broadband access as it would become vulnerable to new onerous telecommunication taxes and fees” given the Federal Communications Commission’s net neutrality rules. The House approved a permanent ban last week but the Senate has yet to act.
Perhaps on the chopping block: Tax relief for homeowners needing a short-sale. Congress hasn’t yet decided whether to extend a tax break for homeowners who sell their homes for less than their mortgage balance. The provision—which could reduce revenues by $5.1 billion—forgives taxes on the difference between what’s owed and what’s raised in a short sale (paywall), or if the lender agrees to reduce the principal owed.
Kansas Governor on his tax cuts and budget shortfall: “We’re going to be able to work our way through.” GOP Governor Sam Brownback is looking at a $160 million budget deficit in the fiscal year starting in July but he’s not worried. He insists his state will be in good shape, “provided we don’t have just a real big global economic set of problems…” He remains convinced that his tax cuts have boosted job growth since unemployment is down and wages are up. State Senate Democratic Leader Anthony Hensley thinks the stronger national economy might have helped.
There’s a middle ground in the battle over inversions. Tax Notes’ Marty Sullivan ponders the misdirected angst over corporate inversions in a new essay (paywall). Politicians bemoan potential job losses, but the real problem is revenue loss. Sullivan suggests that two proposals together would eliminate a major shelter available only for foreign-owned business and unlock US multinationals' offshore profits. First, adopt tougher earnings stripping rules that would apply to all foreign corporations. Second, impose a one-time tax on off-shore earnings and eliminate regular US tax due when dividends are made available to the US parent.
Tune in today for that discussion of the taxation of treats. The Urban Institute hosts a webcast event from noon to 1:30 pm: “Should Governments Tax Soda, Sweets, and Junk Food?” Panelists include Donald Marron and Maeve Gearing of the Urban Institute, who have a new paper on the topic. Also on the panel: Baylen Linnekin of the Keep Food Legal Foundation and Y. Claire Wang of Columbia University’s Obesity Prevention Initiative. Margot Sanger-Katz of The New York Times will moderate the panel. You can watch the webcast while sipping your Big Gulp and no-one will know.
Another treat: There’s a GOP presidential debate tonight. Topics will certainly vary widely, but in case they talk tax plans, your TPC cheat sheet is here.
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