Signed: President Biden signs $1.5 trillion spending bill with Ukraine aid. President Biden signed the measure that funds the government through the remainder of the fiscal year on September 30. It provides $13.6 billion in assistance to Ukraine but no money for additional COVID medical support in the US. A continuing resolution kept the government funded through the weekend.
Durbin: Maybe no reconciliation bill this year. The second-ranking Senate Democrat sounds like a man worn out by the endless intra-party disputes over a big social spending, climate, and tax bill. He told Roll Call, “I am planning to finish this year and hope to guide the Democratic caucus to success, but not assuming that reconciliation be part of it… I’ve been burned by this stove enough times. I'm not going to grab it another time.” Durbin did hold out hope for a separate child tax credit bill.
Failed again: Global minimum corporate tax in the EU. European Union finance ministers voted this week on an initiative to introduce a 15 percent global minimum tax across member nations. But representatives from Malta, Poland, and Sweden rejected the bill. A final deal next month is questionable.
A higher tax reporting threshold for gig workers? The 2021 pandemic relief bill reduced the reporting threshold for a gig worker’s income from $20,000 to $600 starting this year. But a group of Democratic lawmakers now plan to introduce a bill to raise that $600 threshold to $5,000 for income earned after January 1, 2022. Payers such as credit card companies and PayPal as well as firms that rely on part-time gig workers are pushing hard for the change.
Tax cuts are no cure for inflation. TPC’s Howard Gleckman offers a basic economic lesson for governors scrambling to cut taxes in response to inflation: Tax cuts will increase demand at a time when many goods already are in short supply. The likely result: Higher pre-tax prices.
More gas tax holiday talk anyway. Mississippi Lt. Gov. Delbert Hosemann and GOP Senate leaders want a six-month holiday from the state’s 18.4-cent per gallon tax, which funds transportation. He’d replace gas tax revenues with $215 million from the capital expense fund. In Connecticut, Gov. Ned Lamont wants to suspend his state’s 25-cent-per gallon gasoline tax through June.
IRS suspends opinion letters on retirement savings plans. The IRS said it would temporarily suspend its prototype IRA opinion letter program, which provides responses on many forms of retirement savings plans. TaxNotes reports (paywall) the decision will allow the IRS to issue guidance that reflects recent legislative changes.
Senate confirms Young as OMB chief. The Senate approved the nomination of Shalanda Young as OMB director. The former Senate aide served as acting OMB chief for almost a year.
Raskin withdraws Fed candidacy. Sarah Bloom Raskin withdrew her name as President Biden’s nominee to serve as a member of the Federal Reserve Board and as its chief bank regulator. She backed out in the face of opposition from all 50 Senate Republicans and Democrat Joe Manchin, who disagrees with her views on climate change. Yesterday, The Daily Deduction incorrectly identified her as Barbara Bloom Raskin.
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