Details slowly emerge on the Democrats’ budget plan. Senate Democratic leaders agreed to a $3.5 trillion top line for the budget that would carry a broad range of social programs. President Biden pitched the plan on Capitol Hill yesterday. Bernie Sanders helped draft it and centrist Joe Manchin says he’s willing to consider it. The outline reportedly includes new spending for Medicare, elder care, home care, child care, prekindergarten, paid family and medical leave, housing, education, and other safety-net programs. It also may also set the stage for nearly $1 trillion in climate-related legislation including clean energy tax credits.
On the revenue side…. The Senate leaders insist the spending will be fully paid for. The plan contemplates increases in the top individual income and corporate tax rate, changes to the international tax system, and expanded IRS initiatives to narrow the tax gap. It also may include some form of a carbon import tax. The actual tax provisions would be drafted by the Finance Committee.
A New Jersey town plans a pot transaction tax. The Newton Town Council introduced tax on sales of live marijuana plants and manufactured marijuana products. Growers and retailers would face a 2 percent tax on transactions, wholesale sales would be taxed at 1 percent. New Jersey allows local taxes of up to 2 percent on marijuana cultivation and sales.
Mahalo! Hawaii’s tax collections are back at pre-pandemic levels. Governor David Ige’s administration had projected tax collections would fall to just under $6 billion in the fiscal year that ended June 30. But the state collected $7.2 billion. The amount exceeded expectations of the governor, lawmakers, and economic experts.
Billionaire sues Colorado for a CARES Act tax refund. Paul Anschutz and his wife claimed a partial business loss on their 2018 state tax return, when federal tax law limited loss deductions. The 2020 CARES Act suspended the limits on “excess business losses” for tax years 2018-2020. Because Colorado’s income tax conforms to federal law, the Anschutzes want to adjust their c state taxable income for those years. The Colorado Department of Revenue says changes to conform to federal tax law should be incorporated only prospectively.
IRS Security Summit announces awareness campaign about identity theft. Through June 30, there were 222 data theft reports from tax professionals so far this year, more than each of the past two years. “Boost Security Immunity: Fighting Against Identity Theft” will urge tax professionals to take basic actions to curb data theft.
“Ideas and Lives” podcast interviews TPC’s Gene Steuerle. The podcast, co-hosted by the Urban Institute’s Bob Lerman and financial economist Zvi Bodie, interviewed TPC’s Gene Steuerle. In this episode, Gene discusses how he became an economist, who influenced his career, and disturbing trends in patterns of federal spending and budget deficits.’
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