GOP solution to inflation: tax cuts. Criticized for failing to explain how they’d slow inflation, Hill Republicans started to roll out some ideas, including some tax initiatives. House Ways & Means Committee Republicans proposed making permanent the individual tax cuts of the Tax Cuts and Jobs Act and urged the Biden Administration to reduce tariffs (many of which were imposed by President Trump). At the same time, Sen. Chuck Grassley and three other GOP senators would raise the income threshold for the 3.8% Net Investment Income Tax to $400,000 and index it for inflation. He’d exempt from tax the first $300 in interest income ($600 for joint filers) and raise the income threshold for taxing capital gains and dividends to $89,075 ($178,150 for joint filers).
Wyden pushes a windfall profits tax on oil companies. Bloomberg reports Senate Finance Committee chair Ron Wyden will soon propose a 21 percent surtax on producers with profits in excess of 10 percent. The Biden Administration is considering the idea and other Hill Democrats, including Sen. Sheldon Whitehouse and Rep. Peter DeFazio, have proposed their own versions.
Wyden: Exempt small business from online sales taxes. At a hearing on the fallout from the Supreme Court ruling in South Dakota v Wayfair, Wyden said Congress should exempt small remote sellers from having to collect and remit sales taxes in states where they have only customers. Wyden also said Congress should “create clear, standardized rules that lay out what states can require of small businesses outside their borders.” Wyden already has cosponsored a bill to do that. Senior committee Republican Mike Crapo also called for “more consistent thresholds and standards” for sales taxes.
Proposed: A Social Security tax on high-earners. Sens. Bernie Sanders and Elizabeth Warren proposed a Social Security payroll tax on both higher-income workers and those with investment income exceeding $250,000. The extra revenue would support an increase in benefits of $200 a month. The senators say that the tax hike also would extend Social Security solvency for 75 years.
Washington State advocates suspend effort to get voters to repeal a capital gains tax. Opponents of the state’s capital gains tax stopped collecting signatures to get repeal on the November ballot. Instead they are waiting to see if the courts will declare the tax unconstitutional. A Public Policy Polling survey suggests the referendum might have failed.
On international corporate taxation… In a new paper, the Hamilton Project and the NYU Tax Law Center describe the international corporate tax proposals being debated in Congress and explain they’d fit with the OECD’s new multilateral agreement on international corporate taxation.
Tomorrow morning at 9:00: The 12th Annual IRS/TPC Joint Research Conference on Tax Administration. You can watch the only annual conference focused exclusively on tax administration research here.
Rep. Jim Cooper will be Thursday’s guest on The Prescription webcast. The long-time House Budget Committee member will join Howard Gleckman to talk about fiscal policy, the decline of bipartisanship, and President Biden’s agenda. Join them Thursday at Noon. Register 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].
