The federal budget deficit will rise in 2016, for the first time in six years. The Congressional Budget Office’s summary of its annual report shares the details. The CBO projects a deficit of $544 billion, an increase of $105 billion over last year. Why? Thank the tax package Congress passed in December. “Tax extenders,” including many now-permanent tax breaks for individuals and business that Congress once faithfully renewed a year or so at a time, will cost $650 billion over ten years.
About Bernie’s tax plan: Go big or go home? TPC’s Howard Gleckman processes the contrast between the Democratic presidential hopeful and the GOP candidates—and the past fifty years of history. Sanders “is proposing enormous, massive, unapologetic tax increases,” Gleckman says. If Sanders is the Democratic nominee, voters will see a stark choice between tax hikes on everybody, especially the wealthy, and Republicans’ plans for big tax cuts for most, especially the wealthy.
North Dakota joins Illinois in delaying tax refund processing. North Dakota’s Tax Commissioner Ryan Rauschenberger announced “additional preventative measures” to protect taxpayers from identity theft and tax fraud. He recommends that state residents file early, electronically, and with identification ready. Illinois will delay refunds until after March 1, due to similar concerns about third party fraud.
In the United Kingdom, a sugar tax in hospitals. The National Health Service proposes a 20 percent tax on all sugary drinks and foods in NHS cafes. The levy would be introduced by 2020. Initially the tax would apply only to sugary drinks but could generate £20 million to £40 million a year. UK Prime Minister David Cameron recently indicated that he might be prepared to drop his opposition to a national sugar tax.
Nearly three dozen states have passed laws to start ABLE programs. And last month, Congress lifted the Achieving a Better Life Experience tax-advantaged savings program’s state residency requirement. This could make it easier for some people with disabilities to open an account earlier and allow more friends and family members to make state-income-tax-deductible contributions. The ABLE savings program gives a person diagnosed with a disability before age 25 and his friends and family the chance to save money and remain eligible for Medicaid or Supplemental Security Income. Savings grow tax free, as long as withdrawals cover qualifying health or living expenses. The question remains: Will ABLE help the people who need help the most?
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- © Urban Institute, Brookings Institution, and individual authors, 2016.