House Democrats to oppose GOP plan to cut IRS budget to fund Israel aid. The Democratic House caucus members largely oppose the $14.3 billion bill that would provide emergency aid to Israel and cut IRS funding to pay for it. Meanwhile, Senate Minority Leader Mitch McConnell (R-KY) is pushing for a bill that would combine aid to Israel and Ukraine.
There’s a new bill to block energy credits from going to Chinese-owned companies. Reps. John Moolenaar (R-MI) and Darin LaHood (R-IL) introduced legislation yesterday that would ban companies affiliated with the Chinese Communist Party from receiving green energy production tax credits available through the Inflation Reduction Act. The bill is a response to Gotion, Inc.’s plan to build battery factories in Michigan and Illinois. The company is a subsidiary of the Chinese company Gotion High-Tech.
IRS defeats Liberty Global in federal court. The court sided with the IRS in its claim that Liberty Global, a telecommunications company, made a purely tax-motivated transaction to seek a $109 million tax refund. The court found that Liberty Global exploited a mismatch in the 2017 Tax Cuts and Jobs Act. The Wall Street Journal explains that with the loophole, companies could generate foreign profits that qualified for a new tax deduction and escape other taxes.
Court rules that Pennsylvania’s cap-and-trade regulation amounts to an invalid tax. The state had added the rule to the multi-state Regional Greenhouse Gas Initiative (RGGI). But the Pennsylvania Commonwealth Court has held that the regulation violates the state’s constitution, reports TaxNotes (paywall). In the ruling, the court noted that the money paid by power plants for carbon dioxide allowances is high relative to the costs of overseeing the program, and therefore constitutes a tax in violation of the state constitution.
Next week on Capitol Hill: On Tuesday, Nov. 7, the House Ways & Means Committee will hold a hearing on tax-advantaged retirement plans impacted by investment decisions rooted in non-financial factors. The hearing continues the GOP’s pushback against corporate environmental, social and governance (or ESG) efforts. On Thursday, Nov. 9, the Senate Finance Committee will hold a hearing on how the tax code affects high-income individuals and tax planning strategies.
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