Highway funding: Four more days… plus three weeks? To recap: Highway funding expires on Thursday. The Congressional Budget Office estimates Congress will have to find an additional $100 billion, beyond projected gas tax revenue, to fund a six-year bill. So far, the Senate has found three years of funding. The House has not agreed to any new money but has just passed (yet-another) short-term funding patch that would give Congress till November 20 to figure it out.
The ACA faces another challenge. The Pacific Legal Foundation will ask the US Supreme Court to overturn the Affordable Care Act, this time because it claims the ACA violates the Constitutional requirement that tax-raising bills originate from the House of Representatives. Lower courts have rejected this argument. A dozen new taxes raise $500 billion for the ACA by 2019. Meanwhile, the House just passed a reconciliation bill that would repeal tax sections of the ACA.
Pot sales tax revenues in Washington State could hit $1 billion. That’s the four-year estimate from the state’s Office of Financial Management. In the first year of legal recreational and medical sales, marijuana-related tax revenues totaled $67.5 million. The state expects the legal pot business to increase dramatically over the next several years. It estimates $154.6 million in revenues for the current fiscal year, $267 million in 2017, $333 million in 2018, and $369 million in 2019.
And in Georgia, not-pot sales tax revenue shrinks, and calls for tax reform get louder. A new report from Georgia State University’s Fiscal Research Center finds that since 2001, state sales tax revenues have fallen 31 percent. In the legislature, Republicans want to lower the income tax rate—currently capped at 6 percent—to 4 percent over three years, and cut corporate income taxes from 6 percent to 5 percent. To cover the revenue loss, the bill would phase in a statewide grocery sales tax, and add taxes on cigarettes and cable and satellite communications.
A penny for your education… The president of the University of Oklahoma and other advocates call for a one percent increase to the state’s sales tax. The revenues would be used to raise teacher salaries, lower tuition costs, and expand opportunities for at-risk and low-income children. Supporters started a petition drive to put the sales tax initiative on the November 2016 ballot.
Across the pond: Pressure builds against cuts to the earned income tax credit. The United Kingdom’s House of Lords holds a series of votes today on the government’s proposal to reduce the credit. One of the votes is a rarely used “fatal motion” advanced by the Labour party, which could effectively kill the £30bn tax credit bill. Labour says it just wants a delay of the government’s changes until independent analysis can assess the full impact of tax credit cuts. One estimate says low-income families in the UK could lose £1300 a year.
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