The neutrality of the net: Set. Tax effects? Unclear. That’s the conclusion of Politifact after the Federal Communications Commission approved controversial regulations that will treat the Internet like a public utility. The fact checkers examined the question after GOP Senator Mike Lee claimed that net neutrality was a “massive tax increase on the middle class” that was “passed in the dead of night.” It’s worth remembering that the Internet Tax Freedom Act temporarily bans new taxes on Internet service, and the FCC says its order “will not impose, suggest or authorize any new taxes or fees.” But it doesn't do anything to slow those never-ending price hikes. This means your cable, phone, or other Internet Service Provider bill could, as ever, go up.
Booking profits overseas on a $1,000 pill: Hard to swallow. For the nation’s fisc, anyway. The drug, approved by the US FDA in December 2013, is used to treat hepatitis C. It’s manufactured by Gilead Sciences, Inc., whose foreign income before taxes in 2014 was $8.2 billion, reports Bloomberg. Gilead’s intellectual property—including its patent on the drug—resides in Ireland and is taxed at 12 percent. If Gilead’s offshore profits were taxed in the US, the pharmaceutical would owe as much as $5.5 billion in corporate income taxes. Gulp.
“Everybody loves the income tax cuts… but how do we get there?” It’s a fair question, especially coming from a fellow Ohio Republican about GOP Governor John Kasich’s plan. The governor wants to cut income taxes by $5.7 billion over two years but raise other taxes by $5.2 billion. The increases would hit taxes on sales, commercial-activities, fracking, and tobacco. Not surprisingly, those increases aren’t sitting well with the business community, including grocers, auto dealers, and big manufacturers.
And what do tax changes mean for real people? Tax policy is too often shrouded in a haze of jargon and technicalities. But it has a profound impact on every one of us, fuzzy and unclear as it can be. In a new Tax Vox feature we’ll call Tax Hound, I’ll try to cut through the fog and help people understand the code and proposals to change it. Take a look at the first post and let me know what you think.
Tax filing season is off to quite a start. The IRS reports that it issued almost 40 million refunds worth nearly $125 billion as of February 20. The average refund: $3,120. Meanwhile, tax prep firms continue to try to attract business by promising to help with the new complexities of the Affordable Care Act.
Next week on the Hill. On Tuesday, the Senate Finance Committee will hold a hearing on tax fairness. On Wednesday, Treasury Secretary Jack Lew will discuss the President’s budget with the Financial Services and General Government subcommittee of the House Appropriations panel. Jason Furman, chair of the Council of Economic Advisers, will present the Economic Report of the President to the Joint Economic Committee.
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