Presidential candidate Joe Biden has a tax plan. He’s proposing a tax plan that he estimates would raise about $3.2 trillion over 10 years to pay for new domestic spending. He’d raise the corporate income tax rate from 21 percent to 28 percent and impose a 15 percent minimum tax on corporations. He’d raise capital gains taxes by $800 billion but unlike challengers Elizabeth Warren and Bernie Sanders, he’s not promoting a wealth tax on multi-millionaires and billionaires.
Sen. Shelby’s not sanguine about spending synergy. The Senate Appropriations Committee Chairman told reporters that lawmakers are “going to need some kind of understanding at the end of this week or the first of next week to really get something done” before the current stopgap spending agreement expires on December 20. Does that mean lawmakers need to agree on all 12 spending bills? Shelby said, “We’ll take what we can get.”
What if Santa Claus had to levy sin taxes? TPC’s Tax Hound thinks state governments are a lot like that jolly man in the red suit when they decide on “nice” gifts for taxpayers such as spending on public programs or tax cuts, or “naughty” lumps of coal like spending cuts or tax increases. But governments need their residents to be a little naughty to collect revenue from “sin taxes.” The trick is to predict how naughty, and for how long. By comparison, Santa’s got it easy.
Speaking of gifts… The Pew Charitable Trusts report that Americans spent $9.4 billion online this week during Cyber Monday sales. That’s 20 percent more than last year, which means state sales tax collections could see a big boost. Last year at this time, big states including New York, California, and Texas had not yet modified their sales tax systems in the wake of the US Supreme Court decision in South Dakota v. Wayfair, Inc. They have now. That ruling allowed states to require online retailers to collect sales taxes on remote sales.
And speaking again of gifts. Just in time for “Giving Tuesday,” a new study finds that even before passage of the Tax Cuts and Jobs Act, the share of US households that give to charity was falling sharply, and mega-donors were increasingly important to non-profits. The TCJA likely accelerated that trend since it eliminated incentives for taxpayers to itemize. As a result, the share of itemizers fell from about 30 percent in 2017 to about 13 percent in 2018, most of those are high-income.
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