A semi-Grand Bargain? House Speaker John Boehner and the White House have reached a two-year budget deal that would boost spending on both defense and non-defense discretionary programs. It would fund the government through September 30, 2017, and raise the debt limit through March 15, 2017. It would also include cuts in Medicare and Social Security. The deal is far from final: Speaker Boehner presented outlines of the 144-page bill to Republican conservatives last night, without details on spending offsets. House Republicans will likely discuss the bill in their weekly closed-door meeting today. Will there be a vote on the bill tomorrow?
Koskinen back on the non-profit hot seat. The Senate Finance Committee holds a hearing today on the never-ending flap over IRS treatment of political tax-exempts. IRS Commissioner John Koskinen will discuss the agency’s response to the panel’s recommendations on the applications of nonprofits for tax-exempt status.
The race for Ways & Means chair heats up. With the House likely to choose current panel chair Paul Ryan as Speaker on Thursday, Texas Republican Kevin Brady has officially declared his interest in heading the tax panel. He may be challenged by Pat Tiberi of Ohio and Devin Nunes of California. The House GOP steering committee will pick.
An ACA tax subsidy could disappear for many. Affordable Care Act enrollment opens Sunday, November 1, and consumers will need to say whether their household filed a 2014 tax return and reconciled any healthcare premium tax credit with their actual income using Form 8962. If they say “no,” consumers—perhaps tens of thousands—could lose their tax subsidy and face sticker shock when their health insurance bill arrives in January.
Louisiana missed out on $1.1 billion in energy tax revenue over four years. The Louisiana Legislative Auditor reports that the state’s severance tax exemption on fracking is to blame. The exemption lasts for the first two years of a well’s operation, but those two years happen to be the most productive. The state established the exemption in 1994 to spur fracking, and the industry boomed. Louisiana approved severance tax relief for 393 wells between 1994 and 2007. Between 2008 and 2014 that number jumped more than six-fold, to 2,797 wells. Louisiana ended its last budget year with a $1.6 billion shortfall.
Ohio lawmakers say tax hikes for fracking need a closer look. An informal legislative working group, part of the legislature’s tax policy study commission, says volatile commodity prices are one reason to delay action on raising rates. The group says the oil and gas industry is “under financial duress.” GOP Governor and presidential candidate John Kasich wants a severance tax increase to help cover the cost of individual income tax cuts.
In Washington State—a case of “legislative blackmail?” Next week, the state’s voters will vote on Initiative 1366. The measure would lower the sales tax rate from 6.5 to 5.5 percent on Tax Day, 2016, unless the state legislature “refers to voters a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes, and legislative approval for fee increases.” In other words, the measure could prevent any state tax increases for a very, very long time. Only, of course, if the measure passes and survives a review in the courts.
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