Senate edges closer to a temporary spending bill. The Senate hopes to pass a measure this week to keep federal agencies open through March 11. The House passed the bill last week. Meanwhile, lawmakers are making progress on a spending bill for the remaining seven months of the fiscal year.
For the IRS, there is such a thing as bad publicity. TPC’s Howard Gleckman tracks the unfortunate proliferation of recent headlines about the IRS. It isn’t a two-story news cycle, with a January story about the start of tax season and an April story on its conclusion. Rather, the endless accounts cover practically everything that has gone wrong for the IRS, saddled with far more to do and far less funding. "The IRS never will be loved,” concludes Howard. “But it would be nice if it could stop making news.”
Pushing back on a federal gas tax holiday. First, a group of Senate Democrats led by Mark Kelly and Sen. Maggie Hassan began beating the drum for the temporary repeal. They got support from Finance Committee Chair Ron Wyden. But other Democratic senators, including Ben Cardin and, yes, Joe Manchin, are pushing back. Majority Leader Chuck Schumer said no decisions have been made and the White House is equivocating.
Kentucky Gov. Beshear halts rising vehicle property taxes. Gov. Andy Beshear signed an executive order to stop an increase in vehicle taxes resulting from soaring values of used cars—up 40 percent in 2021. He also proposed a year-long reduction in the sales tax rate from 6 percent to 5 percent starting on July 1.
Michigan Senate approves a $2.5 billion tax cut. The GOP-led chamber passed cuts in the personal income tax rate from 4.25 percent to 3.9 percent and in the corporate rate from 6 percent to 3.9 percent. The bill would reduce revenues by $2.5 billion by 2024 and includes no spending offsets. Michigan currently has a $7 billion surplus thanks to federal pandemic relief and higher-than-anticipated income and sales tax collections. Democratic Gov. Gretchen Whitmer says the GOP tax cuts are not sustainable.
Florida House Ways & Means Committee to consider tax breaks, but no gas tax suspension. Republican Gov. Ron DeSantis proposed a five-month suspension of the state’s 25-cent-per-gallon gasoline tax starting in July but it is not in the panel’s tax cut package. Its proposal will include sales tax holidays in May, July, and September.
South Carolina lawmakers double-down on tax cuts. Just last week, the House proposed reducing the top tax rate from 7 percent to 6.5 percent over five years. Now, given higher-than-expected revenues, Gov. Henry McMaster and the Republican House leadership want to gradually reduce the top rate to 6 percent and shrink the number of income tax brackets from six to two. Their plan would cut state revenue by $1 billion over five years.
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