President Biden is planning a major tax increase. Bloomberg reports that the White House will soon propose a package of tax increases that track Biden campaign proposals. These include raising income tax rates on households making more than $400,000 and corporations, increasing the estate tax; paring back tax preferences on pass-through businesses such as limited-liability companies; and boosting capital gains tax rates for individuals making at least $1 million. The measures would offset, in part, the cost of the $1.9 trillion American Rescue Plan Act. TPC has estimated that Biden’s campaign proposals included about $3 trillion in tax increases over ten years. Many of these ideas will be a tough sell, even among many Senate Democrats.
Treasury Secretary Janet Yellen urges a global minimum tax. She’s working with her counterparts in 140 member countries of the Organization for Economic Cooperation and Development to come to an agreement on a minimum corporate tax rate. Two issues on the table: Digital taxation of multinational corporations and establishment of a global minimum tax rate of roughly 12 percent.
Gene Sperling will run the American Recovery Plan rollout. Biden will name the veteran of the Clinton and Obama White Houses as the point person on implementation of the law. As vice-president, Biden himself played a similar role for President Obama’s economic stimulus package in the wake of the Great Recession.
GAO investigates the clean coal tax credit. Reuters reports that the Government Accountability Office is probing a multibillion-dollar subsidy for chemically treated coal. The process is intended to reduce smokestack pollution, but power plants using the fuel may produce more smog, not less.
A New York State tax break that didn’t count on a pandemic. Under the Start-Up NY economic development program in New York State, a new firm’s employees must work in its physical location for at least half the taxable year in order to earn a “no taxes for 10 years” break. But due to the pandemic, the state required workers to clock in remotely in 2020, and now the employees are not eligible for the program’s personal income tax wage exclusion. Employees will have to pay state income tax for the first time since the program started in 2014. Said one start-up participant of such workers: “They were following [Cuomo’s COVID order] and now they’re going to be hit with an income tax bill of $4,000 or $5,000 that they weren’t planning for.”
Today on the Hill. The Senate Finance Committee holds a hearing this morning on the effect of the US tax code on domestic manufacturing.
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