The voices of Tax Policy Center's researchers and staff
Some House GOPers want to help millionaires save for college. Yesterday the House Ways and Means Committee approved a bill to expand the Sec. 529 college savings plan and rejected a Democratic amendment to limit the plans for people earning more than $3 million a year. Bloomberg reports that the amendment would have affected about 0.1 percent of households and could have covered the cost of the bill. As passed by the panel, the bill would cost the government $51 million over ten years.
Ways and Means would also restore a couple of extenders… yet again. The panel voted yesterday to make permanent the deduction of state and local sales taxes and make permanent and simplify the research credit.
Two other House members would like to give health insurance companies a break. Republican Charles Boustany and Democrat Krysten Synema want to repeal the Health Insurance Tax. The tax, estimated to raise $8 billion in 2014 and $14.3 billion by 2018, helps fund the Affordable Care Act. The proposal follows efforts to eliminate a similar tax on device makers.
Will lawmakers ever walk the talk on tax reform? TPC’s Howard Gleckman can’t help but “notice that while policymakers are talking tax reform they are walking tax deform. The more they vow to lower tax rates and eliminate targeted tax preferences (close loopholes in Congress-speak), the more bills they push to create new subsidies or juice up old ones.”
Michigan Governor Rick Snyder says corporate tax breaks have forced budget cuts. The Republican presented a $54 billion budget this week, cutting $102.9 million in 11 state departments to help close a $325 million mid-year revenue shortfall. The deficit, Snyder, says, is due to corporate tax credits created by previous administrations. In one case, a single business received two credits worth $224 million in December, unexpectedly tipping Michigan’s general fund into the red. Michigan Democrats say it’s worth remembering that Snyder oversaw a $1.8 billion tax cut for businesses in 2011.
Can Puerto Rico’s recession be reversed by a VAT? The US territory’s Governor Alejandro Garcia Padilla hopes so. Puerto Rico’s legislature will hold hearings on his proposal to replace Puerto Rico’s sales and use tax and gross receipts tax with a 16 percent value-added tax. Some items like petroleum, certain foods, and prescription medicine would not be taxed. Small businesses with less than $75,000 in annual sales would be exempt.
For your Valentine: Charts and spreadsheets! Highlights from the Committee for a Responsible Federal Budget’s chart book are featured here, including Chart 5, which shows that “the bulk of savings in the President's budget comes from $1.8 trillion in new [tax] revenue and roughly $500 billion in health care savings.” And, the IRS Statistics of Income Division’s Corporation Source Book for 2012 is now available. It presents balance sheet, income statement, tax, and other selected items by size of total assets for all returns with and without net income. You might still prefer roses.
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