Everything’s bigger in Texas. Specifically, Houston’s tax cut: The City Council just cut the property tax rate to its lowest level in nearly thirty years. That’s because 10 years ago, voters approved a property tax revenue cap. Houston has had to lower its property tax rate for the past two years to avoid busting it. Absent the cap, the city would have collected an additional $112 million in property taxes. Also big: Rising pension costs and growth in city debt payments that will contribute to a $126 million budget deficit next year.
What’s the difference between a Cadillac tax and a capped tax exclusion for employer health plans? Not much. TPC’s Howard Gleckman looks at new modeling by TPC and the Urban Institute’s Health Policy Center. Guess what? Neither would raise taxes for many workers. Gleckman says, “The cap would be a modest improvement because its distributional effects are more certain. But the differences are quite small.” The political differences, however, are not.
On the Hill next week. On Tuesday, the Senate Finance Committee will hear from IRS Commissioner John Koskinen. He’ll share progress on the IRS’s response to the panel’s recommendations on the treatment of organizations applying for tax-exempt status. On Thursday, the House may elect its new Speaker. Paul Ryan could leave his “dream job” chairing Ways & Means now that it looks like he has the votes for the Speakership. Representatives Pat Tiberi of Ohio and Kevin Brady of Texas both want the Ways & Means chairmanship.
Gain a better understanding of the debate over Donor Advised Funds. Critics call them “non-transparent tax shelters” while proponents credit them with the “democratization of endowed giving.” Either way, DAFs are a fast-growing part of the charitable sector. A new Urban Institute brief summarizes a June discussion among the nation’s leading DAF providers, nonprofit leaders, and policy experts. Together they sought to discern policy issues and lay out a research agenda.
Bitcoin—It’s tax free, per the European Union. The EU’s top court ruled that the virtual currency, like regular cash, should not be subject to the value-added tax. The court’s ruling relates to a Swedish entrepreneur’s service that exchanged Bitcoin currency for mainstream money.
In Greece, the top tax collector is out of a job. The Greek cabinet removed the general secretary of the Public Revenue Authority (paywall), Ekaterini Savvaidou. She claims no wrong doing, but faces charges of breach of duty for seeking to defer by one year tax collections from the country’s television stations. Greek Prime Minister Alexis Tsipras asked her to resign, but she refused, saying it could lead to “the transformation of the independent General Secretariat for Public Revenue into a frightened tax administration that cannot carry out its duties.” One EU official said, “This may strengthen concerns that a depoliticization of the administration may not happen, and that the judiciary remains a willing instrument in the hands of politicians.”
Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, write us at dailydeduction “at” taxpolicycenter “dot” org.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2020.