Congress aims to vote on stopgap spending bill this week. After bipartisan negotiations in the House and Senate, Speaker Mike Johnson (R-LA) shared last night a continuing resolution that would keep the government funded at current levels through Dec. 20. The legislation does not include a provision backed by Republican presidential nominee Donald Trump that would require proof of citizenship to vote. The House expects to vote on the legislation on Wednesday; the Senate would follow in order to avoid a government shutdown on Sept. 30 at 11:59pm.
Also on Capitol Hill. The Senate Finance Committee will hold a hearing tomorrow on the provision of women’s healthcare, and the House Ways & Means Committee will hold a hearing on reforming the Temporary Assistance for Needy Families program. On Wednesday, the Senate Finance committee will hold a hearing on small businesses and remote sales tax collection.
Why is excluding certain income from tax bad policy? TPC’s Steve Rosenthal argues that despite their political popularity, proposals to exclude tips from tax fail to promote tax equity, efficiency, and revenue, and could encourage millions of workers to game the tax system. In related analysis, TPC’s Len Burman illustrates how tip or overtime income exclusions are worth much more to high-income than low-income taxpayers, and suggests a flat 15 percent subsidy would do far more for low- and middle-income workers.
How can we judge the effectiveness of the IRS? “[I]t’s imperative that the IRS monitor, evaluate, and regularly report its performance,” TPC’s Janet Holtzblatt writes. In her new report, she describes a holistic approach to performance measurement that includes refinements to measures of taxpayer satisfaction, the compliance burden, the tax gap, audit rates, and returns on investment. She argues this would be an improvement over earlier approaches, including those outlined in the IRS’s 2023 and 2024 Strategic Operating Plans.
A grand bargain that acknowledges tradeoffs is the way out of the nation’s fiscal crisis. TPC’s Gene Steuerle reviews the efforts of the Peter G. Peterson Foundation and the Center for Collaborative Democracy. Each outlined broad reforms of current laws, including those that would make Social Security solvent and reform health care and tax policy.
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