The US remains in world of fiscal trouble. And it’s getting worse. While short-term deficits have shrunk in recent years, the fiscal outlook has deteriorated, according to the latest from TPC’s Bill Gale and University of California at Berkeley’s Alan Auerbach. Federal debt held by the public will jump from 75.6 percent of Gross Domestic Product today to 91 percent by 2025 and 152 percent by 2040. It’s what one GOP presidential candidate might call a “disaster,” even without new spending or tax cuts that all the presidential hopefuls are promising. TPC’s Howard Gleckman says Gale’s and Auerbach’s work raises red flags on those promises. There’s a GOP debate tonight: If moderators ask how candidates will pay for their programs, or how they’ll control the rising debt, will candidates answer?
A federal court upheld Colorado’s “Amazon tax.” The law requires out-of-state online retailers to advise customers of taxable items and give them an annual notice of taxes owed. Those retailers also have to share customer information and purchases with the state revenue department. Brick-and-mortar retailers bear a similar burden, the court ruled, so overturning the law would have given out-of-state online retailers an undue competitive advantage. Meanwhile, 13 states are tired of waiting for Congress to solve the online sales tax conundrum, and want to impose their own levies, as The Wall Street Journal reports (paywall). If you want something taxed right, tax it yourself, or so the saying sort of goes…
Senate Finance Committee Chair Orrin Hatch wants corporate tax integration. In his keynote address at Bloomberg BNA’s tax policy event yesterday, Hatch called for taxing corporate earnings once, instead of taxing both corporate income and shareholder dividends. Integration, Hatch says, could significantly reduce effective corporate tax rates, avoid politicized tradeoffs, and prevent future inversions. It could be a stand-alone effort or, Hatch said, complement the House Ways & Means panel’s international tax reform efforts.
Speaking of Ways & Means… Tax Policy Subcommittee Chairman Charles Boustany says he hopes House Republicans will have an international reform draft by the end of March though he held out little hope of much more progress than that in 2016. Expect to hear more about international tax reform when Ways & Means chair Kevin Brady speaks to the Tax Policy Center this morning.
About that Google-UK tax deal: Too small, say some UK lawmakers. The Public Accounts Committee described the settlement as “disproportionately small,” and accused the UK tax authority of settling for “less corporation tax from Google than other countries are willing to accept.” The committee also found it impossible to determine whether the $180 million tax settlement was fair to taxpayers, given the lack of transparency in corporate tax affairs. Meanwhile, France’s tax authority says Google owes $1.76 billion in back taxes.
We know how to improve long-term care financing. The Long-Term Care Financing Collaborative, a group that represents a broad range of independent policy experts, consumer groups, the insurance industry, and service providers, developed consensus-driven recommendations for a sustainable and affordable, public and private insurance-based long-term care financing system. The Collaborative recommends a universal catastrophic insurance program as well as significant changes to make Medicaid’s long-term care benefits more flexible. TPC’s own Howard Gleckman was a co-convener of the Collaborative.
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