The voices of Tax Policy Center's researchers and staff
There’s tougher talk from Treasury. Secretary Jack Lew affirmed administrative authority to curb inversions, telling Bloomberg that “If Congress doesn’t act, we have to take the steps we can, which will reduce the economic value of inversions.”
There’s more talk on the Hill, too. Senate Finance Committee Chair Ron Wyden wants to “continue to work closely with Senator Hatch and his staff to protect the American taxpayer by taking the juice out of these transactions and limiting tax preferred leverage.” Senate Democrat Chuck Schumer may revise the timeline of his effort to address inverted companies and “earnings stripping.” His draft plan would otherwise limit interest deductions for companies that inverted after April 17, 1994. Republicans are not fans of retroactive inversion curbs.
Also on the Hill today: IRS Commissioner John Koskinen will testify before the House Ways & Means Health Subcommittee on the implementation of the Affordable Care Act, including the propriety and availability of tax credits for healthcare premiums. Andy Slavitt, of the Centers for Medicare & Medicaid Services, will also testify.
In Texas, the sales tax may not provide enough revenue. The Dallas Fed foresees a greater burden on the state’s main revenue source. The state’s sales tax of 6.25 percent generates more than half of all state tax revenue. But Texas opted out of the Affordable Care Act’s Medicaid expansion program, foregoing a source of federal dollars. Meanwhile, Texas’ population is growing faster than the national average: Health and education needs will grow. Health care and education currently account for 75 percent of the state’s annual budget.
Gambling for education: Gaining too little, risking too much? TPC’s Richard Auxier charts the evolution of state lottery adoption. Lotteries have largely been used to fund education, as well as game and fish funds, stadiums, or general funds. The catch, Auxier finds: “At best, lottery revenue can only modestly increase spending on education and other programs… [and] states pushing instant and electronic games on their poorest residents are doubling-down on a bad bet.” Only six states, Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah, lack a state lottery.
In Indianapolis, a tax hike funds more officers. The city-county council approved an increase in its public safety income tax rate to 0.5 percent from 0.35 percent. The local government will raise $29 million a year. Of that, $16 million would be spent annually to add 150 Indianapolis Metropolitan Police Department officers by the end of 2018. The city has a shortage of police officers as property tax revenues have fallen in recent years. If Democratic Mayor Greg Ballard signs the council’s measure, the tax increase will take effect January 1.
Interested in subscribing to The Daily Deduction, the Tax Policy Center summary of the day’s tax news? Sign-up here for free access. If you’d like to tell us about a new research paper or have any comments about our new feature, write us at firstname.lastname@example.org.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.