Daily Deduction All talk and no action keeps highways a bumpy mess.
Renu Zaretsky
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The House passes a five-month highway patch. But the Senate still wants two years and Finance Chair Orrin Hatch thinks he might be able to fund five. The House bill relies on $8 billion in cats-and-dogs changes in tax administration and budget gimmicks to fund the short-term extension through December. House GOP leaders insist they need the time to reach agreement on a six-year, fully-funded bill. And one congressman throws cold water on the temporary fix as a road to a long-term bill. Democrat Earl Blumenauer of Oregon would rather double the 18.4-cent-per-gallon gasoline tax than rely on tax revenues from repatriated earnings. He told The Hill: “Going into 2016, when half the Senate is running for president, do we really think we're going to pass comprehensive [tax] reform in that environment, and then siphon some of the money off [for highways]?,” he said. Then there is Ted Cruz. The GOP Senator and presidential candidate threatens to filibuster the highway bill if it includes reauthorization of the Export-Import Bank. In the Texan’s mind, financing overseas investments by US companies amounts to corporate welfare. In a joint statement, the Texas Association of Business and the Texas Association of Manufacturers say that Cruz “has put politics ahead of economic progress and payrolls for his constituents.” Ex-Im reauthorization will likely get a short-term extension, just like the Highway Trust Fund, presidential politics notwithstanding. Chi-town is on its way to having the highest sales tax in the nation. Chicago’s current overall sales tax rate is 9.25 percent, but would hit 10.25 percent after a proposed 1-percent Cook County sales tax increase from .75 percent to 1.75 percent. County Board President Toni Preckwinkle says she’ll roll it back if Illinois lawmakers send more pension money to Cook County. In Ohio, an accidental flat tax? The state’s new two-year budget was supposed to cut business taxes: Backers wanted to extend a  temporary 75 percent exclusion on the first $250,000 of business income through 2015, and then raise it to 100 percent in 2016. Revenue in excess of $250,000 was to be taxed at 3 percent. One problem: The measure as passed failed to specify that the first $250,000 of business income was exempt from the 3 percent levy. So every every business in the state will be subject to the 3 percent tax. Right now most pay less, and would face a tax increase. Lawmakers have until December 31 to fix the mistake. Mr. Telephone Man, there’s something wrong with my line. When I try my baby’s number, I get a click every time…” When 8.8 million taxpayers called the IRS number during the 2015 tax filing season, they heard “courtesy disconnects.” The National Taxpayer Advocate’s midyear report to Congress says only 37 percent of taxpayers who called the IRS’ toll-free line got through to real person. Last year, 71 percent connected. Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, write us at [email protected].