On the Hill. The House Ways & Means committee holds a hearing on international tax reform today. Meanwhile, the panel’s top Democrat, Sandy Levin, and top House Budget Committee Democrat Chris Van Hollen introduced a bill to make corporate inversions less appealing by curbing “earnings stripping.” Now, a US affiliate can deduct interest payments made to its foreign parent from its US taxes. The bill would limit that deduction to 25 percent of taxable income. The limit would apply to companies that inverted on or after May 8, 2014.
Imagine we have a carbon tax. How should we spend its revenue? Urban Institute’s Donald Marron and Brookings Institution’s Adele Morris look at those alternatives in a new policy brief. Their favorites: use about 15 percent of the revenue to soften the blow on lower-income households and coal workers and their communities; or recycle the revenue to cut personal and business income taxes. But they warn that any new tax must be sustainable, something that failed in Australia. “A carbon tax package that businesses and people believe will endure will be more environmentally successful than one that people think may not survive the next election…”
Are those without insurance paying the Affordable Care Act penalty? According to Intuit’s Turbo Tax, most uninsured people are exempt. Data from the tax filing software firm show that 70 percent of people who lacked health insurance filed an exemption from the ACA’s individual mandate. Most often, people could not afford coverage in their area, or could not afford plans through their workplace.
Don’t forget to tune in tomorrow: Tax Policy in 2016—What’s New and What’s Next? TPC hosts the conference from 8:45 am to 12:20 pm tomorrow. House Ways & Means Chairman Kevin Brady and the Senate Finance Committee’s top Democrat Ron Wyden will give keynote addresses. Panels of leading economists and journalists will follow. If you can’t get away, watch the live webcast. You’ll be able to join the conversation on Twitter at #TaxPolicy2016.
As for the GOP presidential debate tomorrow night… Whether or not you tune in, you can catch up on the remaining candidates’ tax plans and TPC analyses of them here. Will the candidates address the concerns about their plans’ viability during the debate? Or… ever?
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- © Urban Institute, Brookings Institution, and individual authors, 2016.