The nation probably will not default on its debt, this year. Senate Democrats and 14 Senate Republicans advanced a bipartisan deal that ultimately will allow Congress to raise the debt ceiling. The agreement will allow Senate Democrats to raise the debt ceiling by enough to cover federal borrowing until at least after the 2022 midterm elections. No Republicans are likely to vote for the debt limit increase but they have agreed to not block it. The borrowing hike still must go through several steps before Congress approves it.
As for the BBB’s taste for SALT…. TPC’s Howard Gleckman reports on a new TPC analysis of two alternative proposals for relief from the state and local tax (SALT) deduction cap. One would raise the cap to $25,000. The other would raise it to $25,000 only for those making $400,000 or less. Like previous plans, the two options “would primarily benefit those making more than $250,000-a-year and do almost nothing for middle-income households. However, they’d be less regressive than the House plan to raise the cap to $80,000.” Notably, they’d cost substantially less. The ideas, Howard concludes, still are poor tax policy, but not as poor as other alternatives.
A study on free IRS tax filing. Politico’s Brian Faler reports that the Build Back Better bill includes the study. The idea: The IRS would provide free electronic filing for households with simple returns. But it has long been opposed by the tax prep industry. While Senate Finance Committee Chair Ron Wyden and other Democrats want to keep the proposal in the bill, they have a problem: Getting the Senate parliamentarian to allow the study in a budget reconciliation bill.
Will the US Supreme Court expand opportunities for tax dollars to support religious schools? In oral arguments yesterday, conservative justices seemed sympathetic to a claim from two Maine families that the state violated the First Amendment by barring religious schools from participating in a taxpayer-funded tuition assistance program. Maine argued tuition aid is a "rough equivalent of a public education.” It asserts eligibility criteria are religiously neutral and focus instead on what a school teaches.
In Milwaukee, pastors warn about city’s “tax and take” process. The city can foreclose on property when owners don’t pay property taxes. But many religious organizations that own property never properly or completely filed for nonprofit 501(c)3 status, which would exempt them from property taxes. Now, a group of pastors wants the city to declare a moratorium on tax foreclosures and other actions. They claim filing and enforcement are confusing and bureaucratic. The city assessor says the pastors’ may understand the application process and hopes that the issue can soon be resolved.
Some San Diego County leaders want to slow a proposed mileage tax. The San Diego Association of Governments (SANDAG) proposed a 30-year, $160 billion regional transportation plan that would replace the current gas tax with a 3.3 cent-per-mile tax starting in 2030. But some elected county and city leaders object. El Cajon Mayor Bill Wells says the plan is driven by “a misguided belief that the world will be safe if people are forced out of their cars.” SANDAG’s CEO says the goal is to “breathe better air, reduce green gas house emissions, and be better citizens.”
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