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Still on the Hill: Extenders and highway funding drama. Today, the Senate Finance Committee is expected to mark-up its proposed restoration of expired tax breaks, and the full Senate plans to hold a procedural vote on highway funding legislation. Congress faces increasing pressure to move quickly given the July 31 deadline: Eighty-one public transportation unions and advocacy groups want Congress to increase federal funding for bus companies in the highway bill.
On the campaign trail, some details of Clinton’s capital gains tax. In a leak to The Wall Street Journal, Hillary Clinton’s campaign dribbled out a bit more (paywall) of her capital gains tax plan. The idea: Further tie rates on the sale of assets to the length of time they are held. While her campaign didn’t explicitly identify her proposed rates, it appears she’d raise rates on assets held for one to three years to something more than the 28 percent proposed by President Obama, at least for high-income investors. The sale of assets held for less than a year already is taxed at ordinary income rates.
Just in case in New Jersey: Maybe a 4-cent gas tax hike. State lawmakers are entertaining an increase in the state’s tax on wholesale petroleum—in case federal highway funding dries up. New Jersey drivers currently pay a 14.5 cents-per-gallon tax at the pump that includes excise taxes and other state levies. On top of the 18.4 cent federal gasoline tax, New Jersey drivers would pay a total of 36 cents per gallon, among the lowest in the country.
And just in case in Lexington, South Carolina: Maybe a restaurant and snack tax for roads. Local leaders plan a two-percent meal tax on restaurants, take-out, and most snacks that could raise $2 million-a-year. The town would use the money to fund three projects aimed at easing traffic congestion and boosting tourism. If approved, it would go into effect October 1. Town leaders are apparently not counting on federal aid.
In New Hampshire, a show of gubernatorial strength against Planet Fitness. Governor Mary Hassan vetoed legislation to cut taxes on the gym as it plans to go public. Republican lawmakers passed a bill that would have let the company avoid a boost in business profits taxes once it starts selling shares. Planet Fitness had threatened to move its headquarters—and 150 to 175 jobs--out of state without the tax break. Hassan says she might reconsider if sponsors can find offsetting spending cuts or tax hikes to pay for the subsidy.
In Columbus, Ohio, a property tax break for jobs. In return for a promise to invest $15 million in about 177,000 square feet of new office space, Columbus will give a developer a tax abatement of $3.4 million over ten years. The city expects to collect $11.4 million in new income tax revenue over that period.
Tax changes in Greece: “It’s all Greek to me.” Greeks will pay another $1,625 a year, or 1,500 euros, in new taxes to generate 5 billion euros for the cash-strapped government. Many retailers plan to incorporate the sales tax increases into prices, which could boost consumer costs by about 9 percent. The tax changes are more than a little confusing. For example a restaurant has to levy a 13 percent tax on spaghetti. But spaghetti with meat? That’s taxed at 23 percent. Said one restauranteur: “How are we supposed to make a menu in these circumstances?”
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