Thirty-fourth verse: Same as the first. A six-year plan to fund roads and transit, costing around $90 billion, has gotten nowhere fast on the Hill. TPC’s Howard Gleckman considers Congress’ progress: It has about three weeks to come up with $11 billion to finance the highway trust fund through the end of the year and prevent a work slowdown on summer road projects. Gleckman’s bet: “A temporary extension of the highway bill through the end of the year, when it will be wrapped up in a last-minute debt limit/government funding/expired tax provisions Lollapalooza.” It’s a good wager: Congress has passed temporary extensions like these 33 times over the past six years.
Finding money for infrastructure won’t be easy. President Obama has proposed a tax on multinationals’ foreign earnings in order to fund infrastructure. But the Alliance for Competitive Taxation, a coalition of 40 companies including Bank of America, Coca-Cola, General Electric, Google and Nike, says a minimum tax on those foreign earnings will move more company mailboxes overseas.
The City of Brotherly Love will tax your Airbnb rental. The Philadelphia City Council voted to legalize short-term home and room rentals last week, and will now tax them at the hotel rate of 8 percent. Good timing for the city, if not visitors: Pope Francis visits Philadelphia in September, and the Democratic National Convention will take place there next year.
“When you wish upon a park, take no taxes at the start…” Back in 1996, Anaheim, California granted Disneyland an exemption from any future admission tax on entertainment venues. The exemption expires next year and Disney has got a deal: It will spend $1 billion to expand its resort if Anaheim renews the exemption for another 30 years. Anaheim has never levied an entertainment gate tax, but if it ever did Disney would be reimbursed under the plan.
What about a tax on your financial transactions? TPC’s Len Burman examines the case for a financial transaction tax. A new TPC paper shows how a 0.1 percent tax on sales of equities and bonds and 0.01 percent tax on sales of derivatives would raise over $50 billion a year. The tax would be progressive and could reduce high-frequency trading. But it could increase tax avoidance, too. Burman concludes that “compared with other plausible ways of raising new revenue, it doesn’t look so bad. And those additional revenues could help avert a debt crisis down the road.”
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