SALT fix is in. House Democrats agreed to raise the state and local tax (SALT) deduction cap from $10,000 to $72,500. The latest version of the Build Back Better bill also restores a House Ways & Means proposal intended to curb the ability of very wealthy individuals to stash money in Roth IRAs.
Paid family leave also back in, for now. House Democrats put the provision back in the bill in response to many members of the caucus. But Sen. Joe Manchin responded by doubling down on his opposition to the idea, especially given Tuesday’s election results. Manchin says he’d rather Congress address paid leave in a bipartisan way, outside of reconciliation.
Senate confirms Ben Harris to be Treasury’s chief economist. Prior to yesterday’s confirmation as assistant secretary for economic policy, Harris served as a counselor to Yellen. He previously was a top adviser to then-Vice President Joe Biden and helped shape Biden’s campaign platform of higher taxes on the wealthy and corporations, as well as more spending on infrastructure, education and clean energy.
How broad should a state’s tax nexus be? The Tax Hound considers NASCAR’s Ohio Supreme Court challenge to the state’s commercial activity tax. The state’s tax commissioner wants to tax NASCAR on network broadcast revenues of races watched by state residents. The commissioner appears to be taking an all-or-nothing approach to the definition of “business in a state.” Is that the best way?
How could Congress help ailing coal miners? TPC’s Audrey Glendenning and Adele Morris address a problem: As coal production declines, so does revenue for the Black Lung Disability Trust Fund. They urge Congress to address the problem by periodically adjusting the coal tax rate to cover current and projected federal black lung expenses and gradually retire the trust fund debt. It could also devote a small fraction of revenue from any carbon tax to the fund. This would allow the program to respond to fluctuating coal production levels and rising numbers of sick miners while keeping the responsibility on coal companies and reducing their incentives to restructure.
How can policymakers improve economic security of low-income retirees? TPC’s Gene Steuerle and Damir Cosic in their new report explain how failing to adjust retirement age for longevity favors retirees with higher incomes. They suggest policymakers could better protect lower-income retirees by increasing the retirement age and devoting savings to raising payments to those in the bottom half of the income distribution.
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