How can we make economic opportunity a top priority in the federal budget? TPC’s Gene Steuerle, in a new policy brief and research report, has some ideas. “Putting opportunity at the forefront of programs throughout the budget could significantly improve equality in earnings, wealth, and human and social capital, but small ball is not going to get us there.”
Ways & Means OK’s IRS bills. On a party-line vote, House tax-writers approved a bill that bars the IRS from requiring tax-exempt organizations to disclose donor lists. The ban was approved following pressure from 501(c)(4) groups that give tens of millions in “dark money” to political campaigns. The panel also OK’d a bipartisan bill to require the agency to notify taxpayers who are victims of identity theft.
How would you sail the US Fiscal Ship? A new game from the Hutchins Center on Fiscal and Monetary Policy at Brookings and the Wilson Center challenges you to navigate the choppy waters of federal debt reduction. The game presents a menu of tax and spending options to reduce the debt from projected levels over the next 25 years. If you want to win, you have to find a combination of policies that match your values and priorities and also set the budget on a sustainable course. It’s not easy. Believe it or not, winning requires tough choices.
Sanders is (mostly) right about Philadelphia’s soda tax. The Urban Institute’s Zach McDade looks at the city’s proposed tax, designed to raise money for preschool education. Hillary Clinton backs it, but the tax is regressive, as Democratic presidential hopeful Bernie Sanders argued last week. Still, its effect would be small, to the tune of $1.50 a week on average. At the same time, “if many of the people affected by the new tax have only a ‘loose’ relationship between sugar consumption and poor health, the tax might not buy much in terms of health improvements. That alone may not be a problem, so long as the tax still raises new revenue for early childhood education.”
Next week: Foreign tax changes and the United States. On Tuesday, May 3, tune in to the 3pm webcast of the inaugural TPC Donald C. Lubick Symposium. Participants will examine the implications of worldwide tax changes for US tax reform. The keynote speaker will be Bob Stack, Treasury’s Deputy Assistant Secretary of International Tax Affairs. TPC’s Eric Toder will moderate a panel discussion with Manal Corwin of KPMG US, David Rosenbloom of the New York University School of Law and the law firm Caplin & Drysdale, and John Samuels of Yale Law School.
This weekend in China: VAT-based tax reform. The nation’s biggest tax overhaul in a generation begins with the rollout of a new value-added tax on Sunday, The Wall Street Journal reports (paywall). The government hopes to catalyze growth in its services industry, including insurers and entertainers. China will allow its fiscal deficit to rise to 3 percent in 2016, up from 2.3 percent last year. Doing so will allow it to lower its corporate tax burden and enact other stimulus measures—to the tune of $77 billion.
Congress will be in recess next week. The Daily Deduction will publish on Monday, and return to its regular schedule on May 11.
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