The IRS continues processing returns, slowly. Bloomberg reports on the “never-ending tax season,” in which over 8 million individual returns needed manual review as of early April. This year’s delayed individual income tax filing deadline is today and the IRS still must process about 5.3 million 2019 and 2020 paper returns. IRS data show that electronic returns filed by professionals is up 10.6 percent from last year, while self-prepared returns fell by 5.6 percent.
It might be hard to restore the full SALT deduction. The Hill reports on the political difficulty congressional Democrats face trying to repeal the federal $10,000 cap on state and local tax (SALT) deductions. But there’s fiscal difficulty, too. The amount of revenue raised by a corporate tax rate increase from 21 to 25 percent could roughly pay for repealing the SALT cap. But President Biden wants that revenue to help finance $4 trillion in infrastructure and support for families, including $425 billion for expanded child care and prekindergarten—also broadly favored by Democrats. And Biden, so far, insists he wants to pay for all that new spending.
This week on the Hill. The Senate Finance Committee holds a hearing tomorrow on funding and financing options for infrastructure. The House Ways & Means Committee holds a hearing Wednesday on leveraging the tax code for infrastructure investment. Also Wednesday, the House Natural Resources oversight subcommittee holds a hearing on tax benefits for the oil and gas industry. The Senate Finance Committee holds a Wednesday hearing on COVID-19 health care flexibilities, including testimony from the Urban Institute’s Bob Berenson.
UK: Global minimum corporate tax proposed by US may be too high. The Biden Administration has proposed a global minimum business tax rate of 21 percent. But the United Kingdom’s Chancellor of the Exchequer Rishi Sunak says the rate may be too high over the long term. The UK plans to raise its corporate tax to 25 percent in 2023. British skepticism about the proposed 21 percent rate could further delay any agreement among member nations of the Organization for Economic Cooperation and Development.
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