The voices of Tax Policy Center's researchers and staff
An outline of a safe plan: No sharp edges. Democratic presidential candidate Hillary Clinton shared her tax agenda yesterday, but as Howard Gleckman notes, most of her proposals are familiar, including a Buffett tax on very-high income households and small business tax relief. She did not endorse broad-based tax reform, or even a carbon tax. Avoiding controversy might make sense so early in the campaign, but as Gleckman concludes, it’s also a little dull.
Another avoider of tax controversy: GOP presidential contender Scott Walker. The Wisconsin governor announced his candidacy yesterday. His tax plan so far rings familiar for many a GOP candidate (there are 15 now): No carbon tax, cut tax rates, and maybe abolish the income tax. Stay tuned.
A new game is afoot to fight the ACA’s “Cadillac tax.” The Alliance to Fight the Forty, a group of pharmaceutical companies, insurance plans, and unions wants to get rid of the Affordable Care Act’s tax on high-cost insurance plans. “The Forty” refers to the 40 percent tax on health plans worth more than $10,200 for individual coverage and $27,500 for family coverage. Republicans and some Democrats say the tax hits middle-class families in areas such as New England and the West Coast, where healthcare costs are higher.
So many dollars, so little action. Minnesota collected $555 million more in taxes last quarter than it had predicted in February. But money can’t necessarily buy happiness. Last month, state lawmakers could not agree on what to do with a $1 billion in surplus revenue. With $555 million more on the table, what will they do in the next budget cycle? More spending? Tax cuts? Stay tuned.
The Greek bailout: Tax hikes are going to hurt a bit. Leaders of Greece’s governing Syriza party agreed to sales tax hikes as part of its third Eurozone bailout deal though many rank-and-file members are furious. Its restaurant and café sales tax would rise from 13 percent to 23 percent. Hotel taxes would rise from 6.5 percent to 13 percent. Will tax increases prompt more tax evasion (somewhat of a Greek pastime)? Perhaps, but it’s harder to avoid sales tax when transactions are documented with credit or debit cards, or bank transfers—used widely by tourists.
Should a new global agency tackle tax avoidance? A group of 142 civil society groups and developing nations would like to shift responsibility from the Organization for Economic Cooperation and Development, which represents 34 wealthy nations, to the United Nations. They say a new UN agency should be addressing corporate-profit shifting, and increasing transparency and tax and investment treaties. The European Network on Debt and Development estimates that poorer nations lose $190 billion in tax revenue every year because of tax avoidance, a greater amount than the nations receive in aid.
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