Democratic sparring continues over the budget. Looking to balance demands of moderates and progressives, House Speaker Nancy Pelosi says she may ask the House to consider both the Senate-passed infrastructure bill and a $3.5 trillion budget resolution as soon as next week. She took the step after nine moderate Democrats said they would not vote for the budget framework “until the bipartisan Infrastructure Investment and Jobs Act passes the House and is signed into law.” A compromise schedule would set the stage for House passage of the public works bill and initial consideration of the budget resolution as soon as next week.
ProPublica: Pass-through provision in TCJA helped two of Sen. Johnson’s biggest donors and then some. The nonprofit news service reports that two donors to the 2016 reelection campaign of Sen. Ron Johnson were the biggest beneficiaries of the Tax Cuts and Jobs Act’s special deduction for pass-through businesses. Johnson claimed credit for the provision that secured those donors $215 million in tax deductions in 2018 alone. ProPublica, analyzing confidential tax records, reports that in the first year after TCJA enactment, 82 ultra-wealthy households saved over $1 billion in taxes from the provision.
Can Congress correct its mega-IRA mistakes? TPC’s Steve Rosenthal says yes. He writes that massive IRAs held by the very wealthy undermine the progressivity and revenue-raising potential of the federal income tax through a retirement savings system that disproportionately favors the rich. He argues that Congress could end the proliferation of mega-IRAs by establishing a combined asset limit for all retirement plans and prohibiting IRAs from holding non-publicly traded assets.
So far, Treasury has paid over $30 billion in advanced child tax credits. In August, 61 million children benefitted from the advance Child Tax Credit (CTC), 1.6 million more than July. Total payments went up too, from $15 billion in July to $15.4 billion in August.
North Carolina House passes its budget, including $2 billion in tax cuts. The chamber’s budget is $25.7 billion for the current fiscal year and $26.6 billion for fiscal year 2023. As for tax cuts: In 2024, the House bill would reduce the state’s personal income tax rate from 5.25 percent to 4.99 percent and the corporate tax rate from 2.5 percent to 2.25 percent. The corporate tax rate would fall to 1.99 percent after that. The budget also makes expenses paid with federal Paycheck Protection Program loans tax-deductible. The Senate and House still need to negotiate a final budget and send it to the governor.
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