International tax reform bites the dust. The last shred of hope that this Congress could enact international tax reform faded when House Ways & Means Committee chair Paul Ryan conceded that talks with Democratic Senator Chuck Schumer to tie the initiative to the highway bill have failed. With Ryan bowing to the inevitable, Congress will now try to agree on a three-year funding scheme, using a mix of some spending hikes and some small revenue-raisers. If that fails, look for an even-shorter fix.
This week on the Hill. Congress has just a few weeks left to agree on raising the debt limit. The Treasury Department estimates it will run out of borrowing authority around November 5. Of negotiations, President Obama has indicated “It's not that complicated. The math is the math.” Meanwhile, Ways & Means will hold a hearing on Wednesday to examine the tax policy implications of higher education costs. On Friday, the House Budget Committee will mark up a reconciliation package that would repeal the Affordable Care Act's healthcare tax provisions.
Should big box stores get a big property tax cut? Local governments in Michigan are crying “foul” over the ability of retailers like Lowe’s and Home Depot to successfully appeal property tax assessments. The stores win reduced assessments thanks to the "dark store" theory: Since big box retailers wouldn't sell stores to other retailers unless they had closed those locations, assessments should be based on the value of vacant property. Democratic and Republican lawmakers have introduced bills to stop the practice.
How can the IRS improve EITC eligibility verification? Determining who counts as a “qualifying child” in families applying for the Earned Income Tax Credit isn’t easy for the IRS. Could eligibility be verified using data from other assistance programs, like food stamps? TPC’s Elaine Maag and colleagues looked at Florida’s Supplemental Nutrition Assistance Program (SNAP) but found that enrollee information is neither detailed enough nor of high enough quality. A better option: Congress could simplify EITC’s “qualifying child” rules.
In the United Kingdom, tax credit cuts in spite of resistance. Prime Minister David Cameron’s own party questioned their necessity, but Cameron says cutting earned income tax credits is the correct path, and that changes ultimately will “come with higher pay and lower taxes.” Three million low-wage workers will learn how much their credits will decrease just before Christmas. One think tank estimates that over a million households will lose an average of £1,350 a year.
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