Treasury Secretary Yellen on corporate tax increase: A return to historical norms. In an address to the US Chamber of Commerce Global Forum on Economic Recovery, Yellen said revenues from a corporate tax increase would reduce inequality and rebuild the country’s infrastructure. “With corporate taxes at a historical low of 1 percent of GDP, we believe the corporate sector can contribute to this effort by bearing its fair share. We propose simply to return the corporate tax toward historical norms.”
As for a global corporate tax… Yellen added that “we are working with our international partners on a global minimum corporate tax to stop the race to the bottom.” The US wants countries agree on a global minimum corporate tax on multinationals and end “unilateral” tech taxes. But the Council of the European Union, in an internal document, says “The definition of a ‘unilateral measure’ agreed in the [Organization for Economic and Cooperative Development] … should not rule out the right for the EU to collect a ‘digital levy.” Namely: The European Commission is developing its own digital tax this summer to help repay the debt from the bloc’s €750 billion recovery fund.
Are Build America Bonds on the way back? Senate Finance Committee Chair Ron Wyden and ranking Republican Mike Crapo are fans and said so at a committee hearing yesterday. So is House Ways & Means Committee Chair Richard Neal. President Biden has not proposed restoring BABs, where state and local governments issue taxable bonds, subsidized by the federal government, for infrastructure spending. Congress adopted the idea during the Obama administration but then let it die.
President Biden and Vice President Kamala Harris released their 2020 tax returns. Restoring the practice that began with President Nixon but was ignored by President Trump, they released their tax returns this week. The president and first lady jointly earned $607,336 in 2020, gave just under $31,000 to charity, and paid $157,414 in federal income tax. The vice president and second gentleman jointly earned $1.695 million, donated $27,000 to charity, and paid $621,893 in tax.
Roanoke, Virginia, will tax plastic bags. The city council approved a 5-cent tax on each disposable plastic shopping bag that stores give to customers. The city does not have a revenue estimate for the tax, but Virginia law requires the cities to spend revenue on education, environmental cleanup, and distribution of reusable bags. The tax takes effect on January 1. “I think the community is ready for this,” said Vice Mayor Trish White-Boyd.
Refunds for taxes paid on unemployment benefits may be reduced or seized. The American Rescue Plan waived federal tax on up to $10,200 of a person’s 2020 unemployment benefits and the IRS is beginning to send refunds to those who filed tax returns before the ARP became law on March 11. But if you have past-due debts (like federal and state taxes, child support, student loans, or unemployment benefits paid in error) your refund may be reduced or eliminated. The federal government can use tax refunds to cover such debts, and third party creditors can garnish those funds.
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].
