Last night's debate was... an actual debate. Moderators barely spoke and Democratic candidates Hillary Clinton and Bernie Sanders explored (and tussled over, at times) a variety of issues... except for their tax plans. Maybe next time.
The President releases his final budget next week, and would like a new tax on oil. He wants to boost investment in clean transportation, and will propose a $10 per barrel fee on oil companies to help cover the spending. The fee, or tax, would generate about $20 billion a year for transit system expansion, and over $2 billion annually for research and development of self-driving vehicles and other low-carbon technologies. The GOP isn’t likely to bite.
On the Hill next week: Budget hearings and no budget hearings. Next Wednesday (Feb. 10), Treasury Secretary Jack Lew will discuss the president’s revenue proposals at the Senate Finance Committee. IRS Commissioner John Koskinen will defend the IRS budget at the panel later that day, and before the House Appropriations Committee next Thursday. Also on the 11th, Department of Health and Human Services Secretary Sylvia Mathews Burwell will testify before the Senate Finance Committee. But in what may be an unprecedented step, the House and Senate budget committees will not invite White House officials to explain the fiscal document. Not a good sign for anyone who may have been holding out hope for consensus this year.
Bill would update tax-free health savings and flexible spending accounts. Senate Finance Committee Chair Orrin Hatch and House Ways & Means panel member Erik Paulsen introduced legislation yesterday that would expand and simplify the tax-advantaged health-related accounts. Over 19 million people have health plans that allow for health savings accounts. The bill would, among other changes, allow individuals to purchase health insurance through their HSAs. Plans that include the accounts would also qualify as minimum coverage to meet ACA mandates.
Why does Marco Rubio want to ditch the capital gains tax? The New York Times’ Josh Barro examines the GOP presidential candidate’s break with his party’s past pattern of proposing a low-rate on gains, rather than a zero rate. He spoke with TPC’s Bill Gale, who notes “There seems to have been virtually no impact of the 2001 or 2003 [capital gains] tax cuts on capital.”
Which came first, the job growth or the tax break? Out-of-state firms that relocate to a state in return for tax breaks shouldn’t get the credit for creating the vast majority of jobs in a state. The Center on Budget and Policy Priorities finds that when the economy is healthy, startups and young, fast-growing companies create most new jobs.
About that Google tax deal with the UK… Of the £130 million that Google will pay the United Kingdom, Google will pay £33 million as a result of a six-year-old compensation audit. That review found that Google did not pay enough tax on stock-based compensation for UK employees. The settlement raises eyebrows. Said Alex Cobham, research director for the Tax Justice Network: “We honestly have no idea if this is a reasonable amount of payment… It’s further proof of the need for transparency.”
Save the date—February 25—to see what’s in store for tax policy in 2016. How will tax policy shape up as the year progresses? What role will it play in the election? Are we situated for a major reform in 2017? TPC hosts a conference at Brookings to cover these questions and more. Keynote speakers are House Ways & Means Chair Kevin Brady and the Senate Finance Committee’s top Democrat Ron Wyden. If you can’t be there in person, you can watch the live webcast.
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