Remember those spending bills? Senate Minority Leader McConnell issues demands. Senate Democrats need 60 votes in order to pass any of the 12 bills that fund the federal government in the next fiscal year. The Senate Appropriations Committee just passed its first package of bills for fiscal year 2022. Senate Minority Leader Mitch McConnell says that none will advance on the floor before agreement on a larger deal that offers equal levels of growth in defense and non-defense spending, and excludes provisions that Republicans view as non-starters. Senate Appropriations Committee Chairman Patrick Leahy said he’s been trying for months to begin bipartisan, bicameral negotiations on those top line figures.
As for how much the infrastructure bill will cost… The Congressional Budget Office expects to release today its 10-year cost estimate of the Infrastructure Investment and Jobs Act. Previous summaries of the bill indicate $550 billion in new spending over a decade, with $480 billion in total revenue offsets.
The tax code’s marriage penalty grows under the American Rescue Plan. TPC’s Gene Steuerle argues that “as designed, the so-called childless EITC [Earned Income Tax Credit] adds to significant marriage penalties and divorce bonuses for many low earners who marry other low earners with children. And Biden’s effort to enhance the credit makes the problem worse.” He suggests two ways to reduce or eliminate those penalties.
Can the retirement system help more people afford retirement? Yes, it can. TPC’s Bill Gale explains why, outlining the new book he and Brookings Institute colleagues David John and Mark Iwry edited and contributed to, Wealth After Work: Innovative Reforms to Enhance Retirement Security. They emphasize three sets of solutions: (1) expanding participation in retirement plans; (2) making it easier for individuals to navigate the retirement system; and (3) using better options to generate reliable income and manage savings during retirement.
Can we still balance free speech and tax-exemption for nonprofits? The Tax Hound considers two developments in the nonprofit world that seem to be about free speech: Should the federal government prevent a tax-exempt nonprofit organization from advocating a policy position? Should a state government collect information on who donates to tax-exempt nonprofit organizations? But a closer look reveals challenges related to money, transparency, and oversight.
Tune in at noon for TPC’s Prescription. Daniel Hemel, a University of Chicago law professor who specializes in taxation, administrative law, and federal courts, will talk with TPC’s Steve Rosenthal about the cap on the state and local tax deduction and proposals for reform, as well as other tax policy changes currently being debated in Congress. Tune in here at noon.
New Jersey will lift temporary tax rules for remote workers in October, and New York might not like it. The temporary rules have allowed New York-based employers to withhold New York income taxes from New Jersey residents working from home. After October 1 those employers will resume withholding income taxes based on where service or employment is performed, and withhold New Jersey Gross Income Tax from those wages. New York has long held that it has the right to to tax the income earned by employees of New York-based companies in their New Jersey homes as a matter of “convenience.” New Jersey plans to continue providing credit to residents for taxes paid to other jurisdictions.
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