The voices of Tax Policy Center's researchers and staff
There’s a bipartisan House effort to double the federal gas tax. It would raise the 18.4 cents-per-gallon tax to about 30 cents, would be inflation adjusted, and would rise again in three years if Congress does not find another way to pay for federal transportation projects. The bill’s sponsors—mostly back-benchers—say it would raise $27.5 billion. That would fund about two years of transportation projects. So far, House leaders have opposed any gas tax hike.
Marco Rubio tries to thread the needle on tax reform. TPC’s Howard Gleckman looks at the presidential hopeful’s tax reform efforts. Rubio says his plan is aimed at helping working families but the biggest beneficiaries are the wealthiest households. His plan, which he prepared with Utah Senator Mike Lee, is a consumption tax that GOP business leaders may like. But hard-line conservatives prefer a flat tax while moderates may worry that Rubio’s plan gives only small cuts to low- and middle-income households. Nobody said running for president was easy.
The House voted to put the estate tax to death. In a largely partisan vote, the House voted yesterday to repeal the estate tax. The 40 percent tax currently applies to estates in excess of $5.4 million for individuals, and $10.9 million for couples. It affects 0.2 percent of American households, and repealing it would cost $269 billion over the next ten years. Now a hotly contested campaign issue, death tax repeal is likely to die in the Senate.
There’s a gentleman in Dallas who might think the House repeal effort is too little, too late. The IRS has billed Sam Wyly and the estate of his brother Charles Wyly for more than $3 billion in back taxes, penalties, and interest from trusts established by the brothers over 20 years ago. The trusts were established in the Isle of Man, a very low-tax jurisdiction. The IRS says Sam owes more than $2 billion and Charles’s estate is on the hook for another $1 billion. More than 75 percent of the $3 billion? Penalties and interest.
Some states’ residents might like a House effort to resuscitate a dead tax break. The House passed a bill to restore and make permanent a measure to allow taxpayers to deduct state sales tax from their federal income tax returns. Nine states do not levy an income tax, and lawmakers from those states think sales taxes should be deductible just as state income taxes are. The bill is unlikely to pass the Senate.
In Nova Scotia, a film tax credit earns controversy. In last week's budget, the Canadian province announced that it would cut the refundable film industry tax credit from 100 percent to 25 percent of eligible labor costs. Film companies can claim the other 75 per cent of the credit only against corporate income taxes they owe the province. That doesn’t sit well with moviemakers who held a rally this week in protest. Meanwhile one Canadian business leader, John Risley of Clearwater Fine Foods, calls the credit “nuts,” noting that “the government cannot afford to be subsidizing any industry to this extent.” He’s not keen on taxpayers subsidizing up to 65 percent of a film company’s salaries. Chances are, he won’t be getting his close-up any time soon.
And in California, a film tax credit gets its regulations. The state modified and tripled its movie and television tax incentive program that’s set to start next month. To award incentives in the $330 million program, the California Film Commission will use a competitive ranking system that relies on a “jobs ratio:” the amount of a project’s planned qualified wages divided by the amount of tax credit sought.
Next week on the Hill. On Wednesday, the House Homeland Security’s oversight subcommittee holds a hearing on how effectively the Department of Homeland Security safeguards taxpayer dollars. Next Thursday, the Senate Finance panel’s health care subcommittee examines the impact of the medical device tax on jobs, innovation, and patients.
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Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.