Tax-exempt college endowments: How big is too big? Private colleges structured as nonprofits with tax-exempt endowments face scrutiny by Republican tax-writers in Congress. Senate Finance Committee Chairman Orrin Hatch, House Ways & Means Chairman Kevin Brady, and the panel’s Oversight Subcommittee Chairman Peter Roskam sent questions to 56 private institutions with endowments of over $1 billion. Answers could lead to legislation requiring schools to spend a minimum percentage of their endowments, or impose limits on how colleges use their endowment funds.
Can a soda tax be easier to swallow? Philadelphia Mayor Jim Kenney promises more than $400 million in revenue over five years. He promises the money would fund universal preschool, local libraries’ renovations, parks and recreation centers, “community schools” that offer social services, and the municipal pension program. He proposes a 3-cent-per-ounce soda tax, but doesn’t use the word “obesity,” or cast the levy as a “sin tax.” Public health advocates usually favor such levies to discourage consumption of sugary drinks but Kelly seems more interested in the cash.
Who cuts taxes the most on new business investment? GOP presidential hopefuls Ted Cruz and Donald Trump would do it, but Cruz’s cuts are bigger. TPC’s Howard Gleckman explains how they would each substantially reduce the marginal effective tax rate (METR) on investment. “While Trump would cut METRs on new corporate investment from 25.7 percent to 15.5 percent, Cruz would cut them to 6.9 percent. And while Trump would cut effective rates for pass-through investments from 19.1 percent to 10.9 percent, Cruz would slash them to 9.2 percent.”
But Trump won’t be outdone… Trump tells The Washington Post that he’d cut taxes and renegotiate trade and military deals in his first 100 days as president. These initiatives, he insists, would eliminate the federal debt in 8 years. The debt is already $18 trillion and Trump would add another $10 trillion over 10 years with his proposed tax cuts. Those first 100 days would be…interesting.
But what would the candidates’ tax plans do to the states? Last week’s panel discussion hosted by the Urban Institute’s State and Local Finance Initiative and TPC explored the issue. The consensus: Candidates pay little attention to what their tax plans would mean for states—though the effects could be dramatic. That lack of attention isn’t surprising, and it isn’t likely to change.
Next week in tax policy. The House Ways & Means Subcommittee on Tax Policy will continue its series of hearings on tax reform proposals on the morning of Wednesday, April 13. Later that day TPC hosts a panel discussion on the four most interesting tax ideas on the campaign trail. What are they? You’ll have to wait ‘til Wednesday.
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