About the EARN Act. The Enhancing American Retirement Now (EARN) Act, passed by the Senate Finance Committee last week, allows older savers to deposit an extra $10,000 a year into their retirement accounts. Plan participants can contribute the extra money in Roth IRAs, where deposits are taxed but withdrawals are not. For congressional scorekeeping, that means revenues are included within the 10-year budget window, but long-term tax cuts are invisible. TPC’s Steve Rosenthal decries the move, saying “it’s an egregious use of budget scorekeeping rules.”
The latest budget reconciliation hang-up. More budget gimmicks: Democrats continue their struggle to cobble together a social spending, climate, and tax bill that can win the support of all 50 Senate Democrats. Politico reports the latest debate is over how long to extend Affordable Care Act subsidies that were temporarily increased in the 2021 pandemic relief bill. Party leaders want to keep the subsidies for 2-3 more years. But Sen. Joe Manchin has refused to accept temporary spending that, he says, makes program costs look smaller than they really are. A permanent extension would cost $220 billion over 10 years.
A steep gun tax might have some big gaps. TPC’s Robert McClelland reviews Rep. Don Beyer’s proposed 1,000 percent excise tax on certain guns. He explains that while the bill would raise prices and reduce purchases of both taxed and tax-exempt guns, it also appears to include loopholes that may defeat its purpose.
Californians may soon have a gas tax rebate. Gov. Gavin Newsom and state lawmakers have tentatively agreed to tap California’s $97 billion budget surplus to provide $9.5 billion in gas tax rebates. Single people who earn less than $250,000 per year and couples who make less than $500,000 would be eligible for rebates ranging between $200 and $350, with higher rebates going to lower earners.
Tune in Thursday for TPC’s Prescription with Kimberly Clausing. The recent deputy assistant Treasury secretary for tax analysis will talk with TPC’s Howard Gleckman about what it is like to help tax policy and about ongoing policy challenges—including proposed reforms to the taxation of multinational corporations. Register and tune in here for the noontime virtual discussion.
Coming in July: The Eleventh Annual Municipal Finance Conference. The joint venture hosted by the Hutchins Center on Fiscal and Monetary Policy takes place virtually from July 18 through July 20. View the agenda and register for the event here.
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].
