Senate confirms Young for OMB post. The Senate confirmed Shalanda Young as the Deputy Director of the Office of Management and Budget. The vote was 63 to 37. Some Republicans opposed Young because of her past support for government funding for abortion.
And Biden will release his budget in bits. The White House reportedly plans to release the discretionary portion of its budget next week. President Biden’s proposals for tax changes and mandatory spending such as Social Security and Medicare will be delayed until later in the spring.
Treasury Secretary Janet Yellen says it’s fair to raise taxes to fund infrastructure. Appearing before the House Financial Services Committee, Yellen said that it was essential to “raise revenues in a fair way” to fund infrastructure to create jobs and boost productivity. In response to a GOP lawmaker’s concern, she said the impact of corporate tax increases on consumer prices is unclear, despite extensive economic research.
What’s so bad about the ARP’s tax cliffs? TPC’s Howard Gleckman peers over the edge of the tax cliffs in the American Rescue Plan: tax-free unemployment benefits and stimulus payments. He concludes that while cliffs (the points at which tax benefits end abruptly) often are problematic, these are less troublesome since eligibility is based on last year’s income. Barring a time machine, there is very little most people can do today to lower their 2020 AGI. Most important: You can’t work less in a tax year that ended nearly three months ago.
How should Congress redesign and improve the charitable deduction? In a new brief, TPC’s Gene Steuerle, Rob McClelland, Nikhita Airi, Chenxi Lu, and Aravind Boddupalli examine how Congress can maximize benefits for those who rely on charities for support. These reforms include a universal deduction for contributions above a minimum amount, tying donations to tax filing season, and improving compliance through better reporting requirements.
West Virginia House panel advances a new tax cut. The Finance Committee passed the plan without a formal report of the budgetary effects. The Republican supermajority in the House will likely pass the bill, which would eliminate the state income tax over 12 years. The first personal income tax cut would for $150 million, with cuts of $150 million in each subsequent year. The West Virginia Center on Budget & Policy estimates that by year seven, the tax cuts would reduce state’s $4.5 billion budget by $1 billion. Gov. Jim Justice has proposed personal income tax reductions totaling $1.03 billion and rebates totaling $52 million for lower-income residents — but also tax increases of $902 million to make up for most of those breaks.
Does the US tax code privilege white families? Writing for The Atlantic, Emory University’s Dorothy Brown argues that it does. She says the origin of the joint tax return was “a policy that was designed to give a tax break to married (heterosexual) couples in which only the husband worked in the paid labor market. That setup favored white couples, whose familial structure was most likely to fit its mold. And it came at the expense of Black married couples.”
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].
