Combining BBB’s climate provisions with a carbon tax. The climate provisions of the stalled Build Back Better Act would reduce net greenhouse gas (GHG) emissions by 17 percent by 2030 at a cost of about $550 billion, according to a new study by the Committee for a Responsible Federal Budget. CRFB estimates that adding a tax of $40 per ton of carbon would nearly double the amount of greenhouse gas emission reductions by 2030 and reduce deficits by $900 billion. At the moment, BBB remains stuck in the Senate, and few lawmakers are talking about a carbon tax.
Tune in Friday for an online event on global tax reform. Learn more and register here for the event co-hosted by Brookings’ Hutchins Center on Fiscal & Monetary Policy and TPC. Panelists will discuss the OECD/G-20 Base Erosion and Profit Shifting (BEPS) agreement. Speakers include Lily Batchelder, Assistant Treasury Secretary for Tax Policy; University of Chicago’s Dhammika Dharmapala; Georgetown University professor Lilian Faulhaber; Alexander Klemm of the International Monetary Fund; TPC senior fellow Thornton Matheson; and Pam Olson of the consulting firm PwC.
New taxes on wealth remain popular but hard to enact. CNBC reports that Americans increasingly favor taxes on wealth: 64 percent support a levy on the super-rich. But policies haven’t gained traction. Legal issues abound: What counts as income? How do you define “billionaire?” The estate tax used to be the federal government’s go-to method to tax wealth, but TPC’s Steve Rosenthal says, “we’re not collecting on that wealth because the estate tax is so porous…. Mega-billionaires who have accumulated massive amounts of appreciated wealth don’t pay tax in their lifetime and can sidestep paying tax at death.”
Illinois lawmakers pass a $46.5 billion budget with $1.83 billion in tax relief. Gov. JB Pritzker will sign the legislation, which provides tax relief on groceries, fuel, and property. The bill includes payments of $50 plus $100 for each of up to three dependent children to residents earning less than $200,000 or $400,000 filing jointly. Illinois also will suspend its 1 percent sales tax on groceries through the end of this fiscal year and delay a planned increase in the 39-cent per gallon fuel tax until at least Jan. 1. It also will provide property tax rebates up to $300.
New York lawmakers pass marijuana tax breaks. They sent a budget to Gov. Kathy Hochul that includes provisions to let marijuana businesses take state tax deductions and credits available to other industries, even though they are disallowed for federal income taxes owed by marijuana establishments.
Tax fraud in France? French prosecutors announced an investigation into the management consulting firm McKinsey. Their probe involves “money laundering aggravated by tax fraud.” The French Senate found that a McKinsey executive likely gave false testimony about the amount of taxes the firm paid. The report says McKinsey’s French entities exchanged funds with headquarters in Delaware, resulting in zero or negative taxes in France for at least ten years.
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