President Biden may declare a climate emergency, but what about clean energy tax credits? Biden may declare a national climate emergency today, which could allow him to take some steps to reduce carbon emissions through executive actions. But he can’t unilaterally expand tax subsidies or tax carbon emissions. Senate Finance Committee Chairman Ron Wyden cautioned that regulatory initiatives will be challenged in court: “We know a flood of Republican lawsuits will follow… Legislation continues to be the best option here.” It would include tax credits that boost cleaner technology.
Democrats plan a slimmed-down version of Build Back Better. Majority Leader Chuck Schumer says the Senate will try to pass by September a health-only budget reconciliation package that lowers prescription drug prices and temporarily extends Affordable Care Act health insurance subsidies. The White House also backs the strategy in an effort to rescue what remains of a Democratic agenda before the coming elections and after Sen. Joe Manchin sunk a much broader bill, including tax increases. Democrats want to pass the bill before ACA premium increases are announced in September.
The long-term tax consequences of Manchin’s thumbs down. TPC’s Howard Gleckman writes that Manchin not only killed the Biden tax agenda for this year, he very likely buried it for the remainder of the president’s first term. Tax increases on corporations could be turned into tax cuts if Republicans win control at least one house of Congress and the economy stalls. Another victim: Efforts to synch US taxation of multinational corporations with the OECD’s broad international reforms.
Prospects are unclear for tax cuts in West Virginia. GOP Gov. Jim Justice’s plan for a 10 percent cut in the state personal income tax rate bumped into a competing Senate plan for a personal property tax cut. The Senate measure would cost the state over $500 million a year since it would have to compensate counties for lost revenue. Justice’s plan would cost $254 million annually but temporarily could be offset by the state’s $1.3 billion budget surplus. Opponents say it is too small to make a difference. Lawmakers vote next week.
There are property tax woes—and other worries—in Chicago… Mayor Lori Lightfoot tied annual property taxes to the consumer price index (CPI). Given high inflation, tax bills could jump by their maximum of 5 percent, adding $85.5 million to city revenues. It’s unclear whether the City Council would authorize that increase, especially given an election in 2023. Lightfoot told reporters, “We’ll make sure that we take the necessary steps to put some guardrails around the CPI going into next year’s budget.”
Then there’s a Pennsylvania county’s property assessment system—or lack thereof. Allegheny County has no schedule to assess property values for tax purposes even though there was a plan to computerize and improve the assessment system back in the 1970s. Instead, the courts play a significant role in managing assessments. University of Pittsburgh economist Christopher Briem explains what happened.
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