Manchin offers more (familiar) specifics for a revised reconciliation bill. The Democratic Senator from West Virginia wants “just a fair, competitive tax code,” that increases the corporate tax rate to 25 percent, taxes capital gains at 28 percent, gets rid of loopholes, and makes sure everybody pays their fair share. Problem is: The other reluctant Senate Democrat, Kyrsten Sinema, opposes tax rate hikes. Senate Majority Leader Chuck Schumer reportedly is trying yet again to broker a Democrats-only bill focused this time on tax increases for deficit reduction.
President Biden’s untaxed profit rule would complete US adoption of BEPS Pillar 2. TPC’s Thornton Matheson outlines how Biden’s new budget proposal would fully align the US corporate tax with the Organization for Economic and Cooperative Development’s Base Erosion and Profit Shifting plan. It requires a “top-up” tax on the domestic income of companies with undertaxed foreign affiliates, raising the effective tax rate on those affiliates to at least 15 percent.
Gas tax updates… Rep. Hakeem Jeffries announced that House Democrats will try to pass legislation to address high gas prices in the coming weeks—and a federal gas tax holiday remains on the table. Meanwhile a Virginia Senate committee rejected Gov. Glenn Youngkin’s proposal to suspend his state’s gas tax for three months. And California lawmakers aren’t likely to suspend the state’s annual summer gas tax increase before May 1.
Ohio GOP lawmakers would phase out the state’s personal income tax. It’s not the first time the idea has come up, but new Republican-sponsored legislation would cut the tax rate by 10 percent over each of ten consecutive years. Ohio would be the eighth state to abolish its personal income tax.
Disney responds to DeSantis. The Walt Disney Corporation issued a statement in response to the passage of the Florida bill that dissolves the Reedy Creek Improvement District and strips Disney of its right of self-governance in the district. Disney asserts Florida violated the Reedy Creek Act that gave Disney full control of the district when it built its Magic Kingdom in 1967, one year before Florida’s constitution was ratified. In a nutshell, the Reedy Creek Act says Florida cannot interfere with the special district as long as Disney owes bond debts to Florida.
Updates from the IRS… The agency is accepting applications for its Advisory Council through June 3. The council provides a public forum for discussion of tax administration issues between IRS officials and the public. Visit the IRSAC webpage for more information and the application form. In other news, the IRS selected Lia Colbert to head the Small Business Self-Employed Division, which oversees collections and examinations of most businesses in the United States.
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