The House votes to ban taxes on Internet access. Again. But senators still want to link the prohibition to a separate measure that would clarify the ability of states to require online sellers to collect sales taxes. Like that little icon you get when your computer is stuck: The two issues just keep on spinning.
To reform or not reform? In spite of Senator Mitch McConnell’s contrary opinion, House Ways & Means Chair Paul Ryan holds out hope for an international tax fix, according to Bloomberg. And Tax Analysts reports that Missouri’s GOP Senator Roy Blunt envisions a push to pass “tax extenders” legislation, those costly expiring tax breaks, before December. Meanwhile, Senate Finance Committee chair Orrin Hatch and top Democrat Ron Wyden have given their working groups an extra month to finish their work. The task forces were supposed to wrap up at the end of May. Not clear if they’ll ever make their suggestions public.
Would a “patent box” hold water? There is bipartisan interest in giving high-tech and pharmaceutical businesses a special tax break on income from their intellectual property. The idea: Reward innovation and make American firms more competitive globally. But The Hill reports that there probably isn’t enough interest to overcome the political and practical obstacles to tax reform in the near future.
Could SNAP and TANF data improve the EITC? In a new TPC paper, Mike Pergamit, Elaine Maag, Devlin Hanson, Caroline Ratcliffe, Sara Edelstein, and Sarah Minton try to find out. Administrative data from the Supplemental Nutrition Assistance Program (food stamps) and Temporary Assistance for Needy Families (welfare) could be used to reduce erroneous payments and target outreach efforts. The authors found that SNAP data could help the IRS pick some cases to audit and flag erroneous EITC claims for people without custodial children. But too few EITC claimants receive TANF to make that program’s data useful.
Most of us have way too much money withheld by the IRS. A new Tax Fact from TPC’s Elaine Maag and Elena Ramirez concludes, “Of the 126 million tax returns the IRS processed through April 17, 2015, almost three-quarters resulted in a refund. The average refund was $2,711 with higher average refunds going to the earliest filers.”
On the Hill. The House Ways & Means Committee holds a hearing on implementation of the Affordable Care Act. A timely session with the Supreme Court’s decision on King v. Burwell expected later this month. That decision will determine whether the IRS can offer federal tax subsidies to ACA enrollees who buy health care coverage through the federal government’s health exchanges.
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