The US economy boomed in the first quarter of the year. Gross Domestic Product grew at an annualized rate of 6.4 percent from January through March of 2021, up from 4.3 percent in the last quarter of 2020. Thanks in large part to an increase in COVID-19 vaccinations and historic levels of financial support from the federal government, the US economy is nearly back to where it was pre-pandemic. New weekly jobless claims also have fallen to a pandemic low of 553,000, but that’s still twice the pre-pandemic level.
Clarification: Who won’t get a tax increase under President Biden’s proposals? Axios cites an unnamed White House official who has redefined Biden’s promise not to raise taxes on Americans who earn less than $400,000 a year. The official says Biden’s plan would be based on the top tax bracket as it would have been under the pre-Tax Cuts and Jobs Act law. In other words, individuals making less than $452,000 and joint filers making a combined $509,300 or less would be exempt from tax increases in 2022.
On TPC’s international investment and capital model (IICM) of cross-border tax rates… TPC’s Thornton Matheson, in her new technical brief, describes how TPC models cross-border tax rates. Thornton explains the model and presents its preliminary outputs, including effective marginal and average tax rates on US investment by country and industry. She also outlines the model’s applications and how it might be extended.
Will the Texas legislature renew tax breaks for companies? In 1993, the legislature passed the Texas Economic Development Act, or “Chapter 13,” that gives property tax breaks to major companies that locate new facilities in the state. Instead of property taxes, a company pays a negotiated fee to a local school district. Today, Chapter 13 agreements grant nearly $1 billion in tax breaks to some of the biggest companies in Texas. The program expires in 2022, but its renewal is not a sure thing. That’s because only 20 percent of Texas school districts—representing only 5 percent of K-12 students—have made the fee deals.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
