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Even if it can, other funding talks continue to maneuver, slowly, around potholes. House Republicans and some Democrats have signaled that the partially-funded six-year Senate bill is a nonstarter. Meanwhile, The Wall Street Journal reports that the White House and GOP lawmakers are talking about ways to fund a long-term transportation bill with a one-time tax on US companies’ foreign earnings banked offshore. Talks even include a possible broad rewrite of taxation of US-based multinationals.
Meanwhile, the Senate Finance Committee will hold secret hearings on the IRS. The panel will hold a rare closed session before releasing its report on the inquiry into IRS treatment of Tea Party groups. Panel chair Orrin Hatch and top Democrat Ron Wyden want to release the report before the Senate’s August recess. They need a closed session to protect taxpayer information.
The “Cadillac Tax” faces growing opposition from labor and employers. The Affordable Care Act includes a 40 percent excise tax on individual health insurance policies that cost over $10,200 or family policies costing over $27,500. The tax takes effect in 2018. That same year, large businesses surveyed by Aon Hewitt expect 3 of 5 of their health plans to be subject to the tax. Employers, insurance companies, and unions are pushing for its repeal.
In Massachusetts, debate continues over a sales tax holiday… The state legislature will probably create a sales tax holiday for one weekend in August. But one lawmaker describes temporary relief from the state’s 6.25 percent sales tax as a gimmick. Another doubts that stores offering a 6.25 percent weekend sale would generate as much excitement. Last year, a similar tax holiday cost Massachusetts $24.6 million in foregone revenue. Some lawmakers think that’s money the state can’t afford to give up, especially since Governor Baker vetoed $162 million in spending on programs including higher and early education in this year’s state budget.
… and the Bay State revisits a candy sales tax. Former Governor Deval Patrick couldn’t get it passed, but some Massachusetts Democrats want to end the state’s sales tax exemption on candy and sugary drinks. Levying the 6.25 percent tax on those items would generate an estimated $52 million annually for the state's Wellness Fund. The fund finances grants for physical-activity programs in public schools. Proponents say that a sales tax could improve public health, while opponents say the selective sales tax would be hard for grocers to collect and for consumers to understand.
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