The House will consider key bills at noon. After a standoff between House leadership and nine moderate Democrats threatened to derail a planned budget resolution vote, the chamber now reconvenes at noon today to consider guidelines for debate on the bipartisan infrastructure bill and the budget resolution.
$3.5 trillion is too much. But how much is enough? Moderate Democratic Senator Kyrsten Sinema says she won’t support a budget with $3.5 trillion in new spending though she backed the budget resolution that allows spending of up to that amount. But neither Sinema nor fellow moderate Joe Manchin will say publicly how big a budget bill they will support. Nor have they given many clues about how much spending they’d pay for with tax increases. They did say they hope the House OK s the Senate-passed infrastructure bill right away.
What can states learn from the District of Columbia’s expansion of its EITC? TPC’s Richard Auxier writes that DC created the nation’s most generous state earned income tax credit (EITC). The lesson: Bigger state EITCs that plus-up the federal credit are simple, affordable, and effective. States just need to consider key reforms, and “crank up their match as high as possible and let the federal formula do the work.”
Vermont sees a slight dip in July personal income tax collections. The tax is the largest revenue source for the state’s general fund, but collections fell short of expectations by $1.72 million, or 2.5 percent. Secretary of Administration Susanne Young said it’s too early to say for sure, but personal income tax collections are generally a reliable economic indicator for the state.
Arizona Supreme Court: New state tax on high earners is okay for now. The court did not overturn a tax on high-income taxpayers but instead sent the case back to a lower court for further review. Voters passed Proposition 208 in 2020 that adopted an additional 3.5 percent tax (on top of the current 4.5 percent tax) on income exceeding $250,000 for single filers and $500,000 for joint filers. The revenue funds teacher and classroom support staff salaries and other professional development. Arizona caps education spending so Prop 208 listed the new revenue as “grants.” The court asked a lower court to determine whether the state can legally spend the new revenue but allowed the state to collect the tax in the meantime.
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