Treasury’s new rules may sink the Pfizer-Allergan merger. The $160 billion deal, under which Pfizer would change its mailing address to Dublin, Ireland, may be off. Treasury’s new curbs on earnings stripping, announced Monday, make the inversion far less attractive to Pfizer.
Its tax extender time again. Senate Democrats and Republicans are squabbling over the fate of expiring tax breaks for renewable energy. Dems say they won’t support a bill to reauthorize the federal Aviation Administration without the extenders, and Politico reports that one key Republican, Commerce Committee chair John Thune, thinks the GOP may have to take the deal. There may be fewer extenders than ever since Congress made many tax breaks permanent last year, but the drama continues.
And speaking for those extenders. The White House is now pitching business tax reform as a way to pay the $680 billion price tag for last year’s extender bill. Republicans are not interested.
Could expanding the EITC hurt married low-income workers? TPC’s Gene Steuerle says yes. Under President Obama’s and Speaker of the House Paul Ryan’s proposals, “many low-wage workers who marry into families not only lose their own childless worker credit, but also reduce the normal credit available to their partner with children.” Steuerle and TPC colleague Elaine Maag offer a fix, though: Split credits for low-wage workers and benefits for children.
Will Alaska tax its Permanent Fund dividend? The state needs $4 billion to close its budget deficit, so House Republicans introduced legislation to levy a 35 percent tax on the Permanent Fund’s dividend for the next four years. If the tax had been in place this year, Alaska would have collected $465 million. Supporters say the tax would buy time for the state to figure out how to restructure its Permanent Fund, which paid each qualified Alaska resident $2,072 last year.
New Jersey: A day late and dollars short. The state’s Office of Legislative Services says the Garden State will fall about $162.1 million short of Governor Chris Christie's revenue expectations for the three months remaining in this fiscal year and all of next year. Granted, the state plans to spend $34.8 billion, but the OLS says it’s difficult to count on tax revenues that can be slashed by shrinking Wall Street bonuses, corporate accounting practices, higher-than-average tax refunds, and the reported relocation to Florida of the state’s richest resident.
The Panama Papers already have sent one prime minister packing. Iceland's Prime Minister Sigmundur David Gunnlaugsson will resign as a result of the leaked financial documents. Gunnlaugsson’s wife owned an offshore company with big claims on collapsed Icelandic banks. Icelanders protested, and the premier resigned ahead of a planned vote of no confidence. The couple says they did not try to hide these assets from Icelandic tax authorities and insists they broke no disclosure rules.
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