Treasury: New proposals to close a tax gap of $600 billion in 2019. Treasury estimated the gap between taxes owed and taxes paid on time was about $600 billion in 2019, and could total $7 trillion over a decade. To close the gap, it proposed several additional initiatives including giving IRS funds to hire more than 87,000 workers over 10 years; more robust information reporting, including of cryptocurrency transactions; and IRS regulation of paid tax preparers. The IRS estimate does not include cryptocurrencies or income from foreign illegal sources. Treasury says its plan could shrink the tax gap by 10 percent and raise $1.6 trillion in its second decade after enactment.
A tax credit for sustainable aviation fuel? The US uses about 45 million gallons of jet fuel every day—or 6 percent of total petroleum use. Reuters reports on legislation to provide a $2.00 per gallon tax credit for lower-carbon aviation fuel until 2031. The credit would have to reduce lifecycle greenhouse gas emissions by at least 50 percent compared with petroleum-based jet fuel. Sustainable fuel comes from feedstocks like grease, animal fats, and plant oils. House sponsors include Democrats Brad Schneider, Daniel Kildee, and Julia Brownlee.
Oregon’s budget surpluses are “stunning.” The state could bring in an extra $1 billion in tax revenues in the current $24 billion budget cycle and in every biennium through 2027. The windfall would trigger a “kicker” tax rebate of up to $1.4 billion. The state must pay the rebate when revenues for a biennium exceed 2 percent above forecast. When it does, the state must return the full amount above the forecast to taxpayers.
Ohio state Republicans would allow remote workers to pay taxes to the city where they live, not work, during all of 2021. During the pandemic, Ohio let cities collect these taxes from workers who were at home until 30 days after end of Ohio’s state of emergency. The provision is due to expire on Aug. 23. The new bill, just approved by a House committee, allows a worker to claim a refund for the entirety of 2021. Supporters say this is not a retroactive benefit since 2021 is not over. Opponents say cities already have budgeted for municipal tax revenues through August.
What will a Florida county do with $500 million in unconstitutionally collected taxes? Hillsborough County collected $500 million from a transit tax that the state Supreme Court ruled unconstitutional. How best to return it? A sales tax holiday? Or rebate checks? County attorneys would allow residents to file refund applications but County Commissioner Stacy White says that plan would return as little money as possible to taxpayers. Protestors agree.
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