Are we closer to a tax extender deal? So far, the proposed deal includes includes a two-year delay on the medical device tax and the Cadillac tax. It also includes permanent extension of the research and development break, expensing rules for small businesses, the earned income tax credit (EITC), college tax credits, and the Child Tax Credit (CTC). Can Congress pull off a big deal or will it end up with another temporary extenders bill? It may depend on how long Congress has to stay around to work out a spending package. Stay tuned. Speaking of the Child Tax Credit… TPC’s Elaine Maag shows how Congress could help lower-income families in the future. The CTC can be up to $1,000 per child under age 17. Low-income parents receive a refundable credit of 15 cents per dollar of earnings over $3,000 but that threshold is scheduled to jump to $15,000 in 2018. If Congress keeps it at $3,000, about 80 percent of all low-income families with children would receive the credit. If the threshold rises that share drops to only 38 percent. A low-income family’s average CTC would shrink, too, from about $1,050 to about $370. Hillary Clinton wants Treasury to crack down on “earnings stripping.” Clinton estimates rules curtailing earnings stripping—whereby a company shifts debt in order to reduce its taxes—could yield $60 billion in tax revenue over 10 years. Treasury officials may still take their own action on earnings stripping. If they did, rules could be retroactive to September 22, 2014, when Treasury and the IRS issued their first guidance on corporate inversions. As for REITs… Tax Notes reports (paywall) that new changes to Real Estate Investment Trusts—another erosion of the corporate tax base—are in the tax extender package. They include a restriction on tax-free spinoffs involving REITs: A deal would only be tax free if, immediately after the distribution, both the distributing and controlling corporation are REITs. That means a non-REIT operating company could not split into two companies, only one of which is a REIT. The Joint Committee on Taxation estimates the change could raise $4.3 billion over 10 years. In Alaska, a personal income tax? It would be the first time the state levied one in 35 years, but desperate budget times call for… taxes. Governor Bill Walker proposed the tax to help fill a multi-billion dollar budget hole that has deepened in the wake of falling oil prices. Walker would also reduce—by about $1,000 in 2016—the dividends most Alaskans receive from the states’ oil wealth trust fund. Yahoo wants to avoid a big tax bill with a “reverse spin off.” The financially troubled US tech company mulled selling its 15 percent stake in the Chinese e-commerce giant Alibaba. Now Yahoo wants to keep those shares and instead spin off its core business into a newly formed publicly traded company. This would require third party consent, take more than a year to complete, and could hurt Yahoo in the long run… but would save a bundle in taxes. Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, write us at dailydeduction “at” taxpolicycenter “dot” org.