House Speaker Kevin McCarthy unveils the GOP debt limit proposal. The Limit, Save, Grow Act would raise the debt ceiling by $1.5 trillion – potentially staving off a default until March 2024 – while saving the federal government $4.5 trillion by cutting discretionary spending, clawing back unused COVID relief funds, and repealing the IRS funding boost and clean energy incentives from the Inflation Reduction Act. The speaker hopes to bring the plan to a floor vote next week.
The Problem Solvers Caucus also has a plan. The bipartisan group of 64 lawmakers released a framework of their proposal yesterday. They offered an outline of their fiscal wish list, including a suspension of the debt limit through the end of the calendar year and the creation of an outside commission to find proposals to reduce the country’s $31.5 trillion debt over the long haul. The group also wants an annual report conducted by the US comptroller general on “the fiscal state of the nation,” as well as a “mid-year report” submitted by the president on the national budget.
Minnesota lawmakers are considering a state tax credit for e-bikes. Minnesotans purchasing electric-assisted bikes could get a tax credit worth up to $1,500 under a provision added to the Minnesota Senate transportation budget. The program, modeled after one in Denver, would be capped at $2 million for the budget biennium. The bill would direct 40 percent of the credits low- and middle-income e-bike buyers.
Will Alaska levy a statewide sales tax? Alaska Gov. Mike Dunleavy may be open to signing into law a statewide sales tax without a referendum. In his first term as governor, Dunleavy had indicated a referendum would be needed. He may support a 2 percent sales tax, which a Republican state lawmaker already proposed. Alaska has never levied a state sales tax, though localities have the authority to impose a tax of up to 7.5 percent.
The EU has a new carbon border tax. The Wall Street Journal reports (paywall) on the new policy passed by the European Union’s parliament this week. The Carbon Border Adjustment Mechanism levies a charge on imports to the EU bloc from countries that don’t put a price on carbon emissions. It will be phased in between 2026 and 2034, and covers iron, steel, cement, aluminum, fertilizers, electricity, and hydrogen. Policymakers still need to finalize rules and regulations for the policy.
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