The voices of Tax Policy Center's researchers and staff
Congress has adjourned. The Daily Deduction will post on Mondays until the 114th Congress convenes.
Expired tax breaks: Renewed for 2014. Last night the Senate passed a $42 billion package of expired tax breaks by a vote of 76-16. In two weeks' time, the tax breaks will expire. Again. Senate Finance Committee Chair Ron Wyden wanted to extend the tax breaks through 2015 and open the door for a broader tax overhaul. He voted against the bill, saying "Congress is turning in its tax homework eleven and a half months late and expects to earn full credit. The next chair of the Finance panel, Orrin Hatch, said “Never in the history of tax legislation have so many voted for so little and been so disappointed.”
The ABLE Act also passed. States would be allowed to establish and operate an Achieving a Better Life Experience program. Individuals with severe disabilities under age 26 would be able to open a section 529 savings account and make annual contributions up to the gift tax exclusion limit. That limit was $14,000 in 2014, and is adjusted for inflation each year. The $2 billion cost of the ABLE Act is fully offset in the budget.
Meet the new Senate Finance Committee members. Republicans Dan Coats of Indiana, Dean Heller of Nevada, and Tim Scott of South Carolina join the panel in the 114th Congress. That means there will be 14 Republicans and 12 Democrats. The current panel has 13 Democrats and 11 Republicans, but no Democrat must drop off since Jay Rockefeller has retired.
War: What is it good for? Absolutely nothing, especially when it comes to the one Congress has waged on the IRS and its budget. TPC’s Howard Gleckman acknowledges that the agency could be run more efficiently, but that’s not what IRS budget cuts are about: “They are driven by lawmakers who have made the IRS a symbol of all they hate about government and those who don’t have the courage to defend an unpopular agency. They are all happy to attack the IRS for harboring jackbooted thugs even as they criticize it for allowing the tax gap to grow. But they won’t give it the resources it needs to do its job.” That does taxpayers and the nation’s fisc no good at all.
We’ll likely spend less on gasoline in 2015. The average US household is expected to spend about $550 less on gasoline in 2015 compared with 2014, according to the US Energy Information Administration. In fact, annual motor fuel expenditures could fall to their lowest level in 11 years. Why? Retail gasoline prices are falling and there are more fuel-efficient cars on the road. Consumers don’t respond to changing gas prices by shifting their driving behavior very much, though prices may affect their vehicle choices. When gas prices are low, drivers use the money elsewhere. When prices are high, they spend less on other things. Could 2015 finally be the year the US raises its gas tax? Nope.
The majority of New Jersey drivers don’t want a state gas tax hike. A Rutgers Eagleton poll found that 56 percent are against raising the levy. The tax funds New Jersey road projects, but those against the tax hike believe the state's non-toll roads are just fine and don’t need more repair money. The American Society of Civil Engineers recently found that 35 percent of New Jersey’s 6,800 miles of major roads are in “poor” condition.
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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.