The Supreme Court rejects Puerto Rico’s municipal bankruptcy law. The high court overturned a commonwealth law that would have allowed island utilities to restructure their debts. The justices ruled 5-2 that only Congress has the authority to govern debt restructuring by the island’s municipalities and utilities. About $20 billion of $72 billion in outstanding Puerto Rican debt was issued by the island’s troubled electric utility. The island is waiting for Congress to create a mechanism to work out those debts before a July default.
Next week on the Hill: Another IRS impeachment hearing. The House Judiciary Committee will hold its second hearing on June 22 to determine whether to impeach IRS Commissioner John Koskinen. Outside experts will weigh in on the findings from the first round of hearings and recommend whether or not Congress should take additional action. For his part, Koskinen plans to finish out his term, and says allegations of misconduct lack merit.
Governor Christie has no plans to raise the New Jersey gas tax. The state’s Democratic lawmakers plan to introduce a $20 billion roadwork funding plan this week. It would raise the 14.5-cent-per-gallon gas tax by 23 cents and phase out the estate tax. GOP Governor Christie says he’ll oppose the plan, which he calls unfair. New Jersey’s gasoline tax is among the lowest in the country, second only to Alaska.
In Germany: Tax cheats and carbon-emission trading. A German court found seven former Deutsche Bank managers guilty of conspiracy for their role in a scam involving value-added tax refunds for carbon-emissions trading. The seven bankers set up sham companies to process trades and dodge $163 million in taxes.
China’s auto lobby would like a permanent tax cut. The China Association of Automobile Manufacturers calls for a permanent tax cut on small cars to encourage the development of fuel- efficient vehicles. China lowered the tax on purchases of smaller-engine models from 10 percent to 5 percent in October, but the rate is due to go back up at the end of this year. Auto sales have grown for seven of the past eight months.
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