The voices of Tax Policy Center's researchers and staff
In Nevada, the GOP governor’s $1 billion business tax hike wins support. The state senate passed Governor Brian Sandoval’s plan to shift the state’s flat $200 business license fee to a version of a gross receipts tax. According to the measure, which would raise nearly $1 billion over 2 years, the state’s largest firms would owe as much as $4 million. Would Tesla Motors, which recently got a $1.3 billion tax incentive to build a battery gigafactory in Reno, owe the max tax?
Will Alabama get a flat tax and a corporate tax rate cut? The state’s Senate Republicans want to establish a flat tax for individuals and lower the corporate income tax rate. They’re proposing a constitutional amendment to cut the top 5 percent individual income tax rate to 2.75 percent and reduce the 6.5 percent corporate rate to 4.59 percent. The bill would also eliminate deductions, exemptions, and credits that could simplify filing but also make the levy even more regressive. The Alabama Department of Revenue says the individual tax change could be revenue neutral, but only if the state eliminates all tax preferences. The state faces a deficit of at least $290 million next year.
Colorado will ask voters to let the state keep their pot tax refunds. Legislators began work yesterday on a ballot measure asking taxpayers to forego $58 million in pot tax refunds and instead put the money into the public school construction, community programs, and the general fund. The state’s Taxpayer Bill of Rights requires that taxes be refunded when overall collections exceed growth limits, unless voters decide otherwise.
In Congress, a Democrat would pair corporate tax cuts with a carbon tax. Maryland’s John Delaney announced a plan to tax greenhouse gas emissions. He’d use the revenue to cut the corporate rate to 28 percent or lower; help subsidize low- and moderate-income households who’d pay a proportionately large share of the carbon tax; and fund job training, early retirement, and health care benefits for coal workers who’d likely lose jobs if the price of carbon-based fuels rises. Pairing a carbon tax with corporate tax reform could be a good match, as long as the effort overcomes distributional challenges. Learn how in a TPC paper by Donald Marron and Eric Toder.
IRS, “heal thyself?” House Republicans think the IRS can only blame itself for problems during the recent tax season. Their report, released yesterday, says “Wasteful spending and failure to prioritize taxpayer assistance led to millions of calls going unanswered for filing season 2015.” IRS Commissioner John Koskinen defended agency spending at a congressional hearing yesterday, noting new responsibilities including statutory requirements of the Affordable Care Act. Congress gave the IRS has $346 million less to spend this year than it did last year.
Today on the Hill. The Senate Finance panel’s health subcommittee holds a hearing on the medical device tax and its impacts. Witnesses include Bruce Heugel of device maker B.Braun of America; Quinton Farrar of West Surry Strategies; Alyra Donisvitch, a patient from Maine; and Mark Judge, a patient advocate from Pennsylvania. The full Finance panel will hold a hearing on Treasury appointments. The House Ways & Means Committee will mark up several trade bills.
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