Democrats plan their debt limit response. President Biden will meet today with top Hill Democrats to develop a joint strategy to increase the debt ceiling. House Republicans insist they won’t raise the borrowing limit until Democrats agree to deep spending cuts. Biden aides say he won’t link the two issues. Separately, Treasury Secretary Janet Yellen nixed the idea of minting trillion-dollar coins to avoid the debt problem. The former Fed chair told the Wall Street Journal (paywall), that the Federal Reserve likely would never go along.
Why was the IRS so slow to audit Trump’s tax returns? Fourteen Ways and Means Committee Democrats have asked the Government Accountability Office to investigate why the IRS delayed its mandatory presidential audits of Donald Trump, Politico reports. Notably, the signatories did not include top committee Democrat Richard Neal.
Rhode Island Gov. McKee plans to cut sales, and gas taxes by $60 million. In his second State of the State address, the Democratic governor will announce a plan to reduce the sales tax from 7 percent to 6.85 percent, a cut of $35 million annually. He’d halt an automatic July 1 increase in the gasoline tax by 3 cents per gallon, reducing revenue by $25 million. He’d also give residents a rebate for the gross receipts tax on energy bills this winter, reduce the corporate minimum tax, and eliminate a tax that businesses pay for litter.
Nebraska Gov. Pillen calls for $1.5 billion in tax cuts. His legislative package would immediately eliminate the tax on Social Security benefits and create a flat 3.99 percent individual income tax rate by 2027. It also would allow $25 million annually in tax credits for donors who fund scholarships for private K-12 students.
Indiana lawmakers seek to eliminate individual income tax. The tax contributed 39 percent of all state revenues in 2022, according to budget analysts. Senate Republicans would eliminate the tax entirely but have not said how they’d replace the revenue. The Indiana Chamber of Commerce thinks the idea has potential but urges a responsible approach.
OECD: Revenue gains from global tax reform will be higher than expected. A new analysis from the Organization for Economic Cooperation and Development (OECD) finds a global corporate minimum tax could raise $220 billion annually, 9 percent higher than current corporate income tax revenues The group previously estimated a $150 billion bump. The findings were presented in a webinar last week.
Next month: “The Federal Income Tax: Racially Blind But Not Racially Neutral.” On Feb. 24, the American Tax Policy Institute will host the day-long forum in Washington, DC. The event will include panel discussions on topics including race, history, and taxation; tax systems and privileged choices; systemic inequalities undergirding facially neutral tax laws; and discrimination through non-discrimination. Visit the ATPI website for more information here.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
