To the President’s desk: A short-term highway patch. Yesterday the Senate approved an $8 billion stop-gap authorization for federal transportation funding, with just a day to spare before funding is due to expire. This brings the number of short-term extensions in the past six years to 34. Congress will deal with a longer-term bill for the fall. Really.
Because there’s not enough riding on the fall calendar: The debt limit looms. In a letter to Congress, Treasury Secretary Jack Lew said he feels confident that the US can avoid default on its debt until at least late October. In addition to highway funding and the debt limit, this fall Congress also needs to deal with Export-Import Bank reauthorization, expired tax breaks, and, oh right, government shutdown brinksmanship.
Tax synergies: Can’t live with ‘em, can’t live without ‘em. Valeant Pharmaceuticals faced questioning by the Senate Permanent Subcommittee on Investigations yesterday. The company’s former chief financial officer and current board member assured the committee that tax synergies do not factor into Valeant’s identification or pricing of acquisition targets. That’s not, however, what the company conveyed to stockholders. Meanwhile, Jim Koch of the Boston Beer Company told the panel (paywall) that the US tax code encourages takeovers: Foreign companies make 90 percent of US-brewed beer. Cheers!
IRS Commissioner John Koskinen isn’t going anywhere. Or at least, he’s not worried that he’ll soon be fired, as some in the GOP have demanded. He hinted to reporters that perhaps Republican lawmakers are disappointed that their multiple investigations failed to turn up a political smoking gun in the IRS scrutiny of Tea Party groups. “I've testified honestly and truthfully about what I knew at the time I knew it," Koskinen said. “If it hasn't met all their expectations… that’s not our fault.”
A warning to states: Tax cuts do not boost economic growth. There is little to no evidence to support it, but supply-side economics remains in vogue among conservative-led states. TPC’s Bill Gale reviews the research, and concludes: “There is no reason to believe that tax cuts are an elixir for economic growth…[and] with or without the elusive supply-side effect, high-end tax cuts have exacerbated income inequality.”
Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, write us at dailydeduction “at” taxpolicycenter “dot” org.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2020.