Did Joe Manchin just justify a carbon tax? Sen. Joe Manchin called tax credits for electric vehicles “ludicrous” but by doing so, did he offer a powerful defense of a carbon tax? TPC Howard Gleckman writes he may have, if only inadvertently. While Manchin is right that tax credits would do little to encourage EV purchases in today’s supply-constrained market, a carbon tax would be a much more efficient way to get people out of their gas-guzzlers in the long-run.
Georgia offers EV company Rivian $1.5 billion in tax incentives. The electric vehicle maker plans to build a $5 billion factory east of Atlanta that would produce 400,000 vehicles annually. In exchange for $1.5 billion in tax incentives, Rivian promises to create 7,500 jobs with an average wage of $56,000 by 2029. The company would get $700 million in property tax breaks, a $200 million income tax credit over five years, and sales tax exemptions that will save $175 million on machinery and $105 million on construction materials.
Indiana’s gas tax just increased. While other states are enacting gas tax holidays, Indiana’s just rose to 24 cents per gallon, up 10 percent month over month. That’s because the tax is based on a monthly average of retail gas prices. Together with an excise tax of 32 cents, an annual 1 cent inflation adjustment, and the federal gas tax of 18 cents, the total gas tax in Indiana is now nearly 75 cents per gallon, the highest in state history.
UK: No windfall tax on energy industry profits? United Kingdom Prime Minister Boris Johnson seems to be ruling one out. He says a tax on energy firms’ earnings would “discourage them from making investments we want to see, that in the end will keep prices lower for everybody.” Meanwhile, energy giant BP reported an underlying profit of $6.2 billion (£4.9 billion) in the first quarter of the year compared to $2.6 billion in the same period last year, exceeding expectations. The company promised to invest £18 billion in green and fossil fuel operations the UK by 2030, and estimates it will pay £1 billion in tax on North Sea profits alone this year.
Rettig wants legislative curbs on conservation easements. The IRS commissioner told a Senate hearing yesterday that while the agency has devoted substantial resources to shutting down the tax avoidance deals, “we have not had an impact on essentially slowing the volume of these transactions.” Rettig says Congress needs to limit the deals.
Connecticut House approves $600 million in tax cuts. The lower chamber approved a $24.2 billion state budget for the fiscal year that begins July 1. It includes over $600 million in income tax cuts, suspends a car tax, and extends a gas tax holiday. The Senate is expected to approve the plan, which Democratic Gov. Ned Lamont is likely to sign.
German prosecutors search Morgan Stanley’s offices in Frankfurt in tax fraud probe. The Wall Street Journal reports (paywall) that Morgan Stanley offices, as well as homes of two suspects, have been searched as part of a years-long tax fraud probe. The investigation centers on certain transactions dating back to 2006 in which parties can buy, borrow and sell shares during specific days before and after dividend payouts. During that time, many investors could claim refunds for taxes paid on the dividends. German authorities argue that some of these transactions and refunds were fraudulent.
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