Scaling back infrastructure. In an effort to woo GOP support, President Biden offered to scale back his infrastructure bill from about $2.2 trillion to about $1.7 trillion. But Republicans say they won’t accept such a plan. Biden said he’d trim some increases in traditional infrastructure spending. Senate Republicans, who have proposed about $568 billion in funding mostly for roads and bridges, want Biden to abandon proposals such as funding for Medicaid home care. There appeared to be no progress on a funding compromise either. Democrats want to raise corporate income taxes. Republicans prefer new unspecified user fees.
How about a 15 percent global minimum tax? The Biden Administration signaled its willingness to accept a global corporate minimum tax rate of 15 percent—significantly lower than the 21 percent minimum tax it proposed for US-based multinationals. In a statement late last week following ongoing talks with the OECD, Treasury said, “The global minimum tax rate should be at least 15%. Treasury underscored that 15% is a floor and that discussions should continue to be ambitious and push that rate higher.”
Finance considers key Treasury nominations. Tomorrow the Senate Finance Committee considers the nominations of Lily Batchelder to be Assistant Secretary for Tax Policy, Benjamin Harris to be Assistant Secretary for Economic Policy, Nellie Liang to be Under Secretary for Domestic Finance, and Jonathan Davidson to be Deputy Under Secretary of the Treasury.
Also on the Hill this week. On Thursday, the House Ways & Means Committee’s Worker and Family Support Legislative Subcommittee holds a hearing on universal paid leave and guaranteed access to child care. Also Thursday, the House Appropriations Committee holds an oversight hearing with Treasury Secretary Janet Yellen.
Treasury: Report big cryptocurrency transactions. The department announced last week that cryptocurrency traders have to report any transfer worth $10,000 or more to the IRS. Treasury said “Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.”
Tracking Biden’s tax agenda. TPC created a comprehensive matrix that compares Biden’s campaign plans with his presidential proposals to date. TPC’s Howard Gleckman explains that “so far, the president has stuck relatively closely to the ideas he raised in the campaign.”
In Oklahoma: Lawmakers advance income tax cuts and more tax credits for public and private K-12 education. The state House voted to cut individual income tax rates by 0.25 percent. It would cut the top rate from 5 percent to 4.25 percent. It also would lower the corporate income tax rate from 6 percent to 4 percent. The changes would take effect Jan. 1, 2022. The state Senate voted to increase a $5 million tax credit program for donors to public or private school foundations.
In Nebraska: Lawmakers want to cut the state income tax on Social Security income. The state legislature voted to eliminate the state income tax on Social Security benefits by 2030. The bill would cut the tax by 50 percent by 2025. The plan would reduce annual revenue by $73.8 million by 2025 and $168 million by 2030. AARP notes that 13 states currently tax Social Security income.
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