Negotiations are underway to fund the government after Oct. 1. Politico reports that Sen. Susan Collins (R-ME) expects the Senate and House to soon begin government funding negotiations. Senate Majority Leader Chuck Schumer (D-NY) is preparing a stopgap funding bill to avoid a government shutdown on Oct. 1, in case negotiations falter. “Both sides are going to spend the next few days trying to figure out the best path,” Schumer said. 

Exempting tips from federal income tax would benefit very few workers. A new TPC analysis finds that a small percentage of households and fewer than 60 percent of tipped workers would benefit from proposals to exempt gratuities from federal income tax. Only 2 percent of households would receive a tax cut if gratuities were free from federal income tax. If the tax break was limited to households with adjusted gross income of $75,000 or less were eligible, about 1.5 percent would benefit.  

Trillions of dollars escape taxation, but there’s a fix. TPC’s Steve Rosenthal considers a disagreement between lawmakers over the effective tax rate for the nation’s highest-income taxpayers. “Their dispute dances around the deeper problem: Trillions of dollars of unrealized capital gains permanently escape taxation, disproportionately benefitting the richest Americans.” Congress could solve the problem by taxing unrealized gains at death, argues Rosenthal.      

Sweden removes its airfare tax. The Swedish government’s budget for next year does not include the nation’s current flight tax. The tax went into effect in 2018. Via The Guardian, the absence of the tax, starting in July 2025, will lower ticket prices from Sweden  by about $7.88 on European flights and by $32 on flights outside of Europe. 

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