Today on the Hill. The Senate Finance Committee is likely to send to the full Senate the nomination of former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Despite some Republican concerns about President Biden’s proposed levels of federal spending, Yellen is likely to win bipartisan support on the panel.
No gas tax down the road. At his confirmation hearing yesterday, Transportation Secretary-designate Pete Buttigieg said "all options need to be on the table" to pay for increased infrastructure spending. A bit later, a spokesman clarified that a motor fuels tax is not one of those options.
Could a tax credit fix capitalism? TPC’s Len Burman thinks so, and presents his proposal in a new paper for the National Tax Journal. He suggests a large universal wage subsidy that operates as a refundable Universal Earned Income Tax Credit (UIETC). He estimates the plan would raise after-tax incomes for about 100 million low- and middle-income households. Another version would pair UIETC with a form of universal basic income. Len says his plan could finally guarantee an economy that works for all, not just those at the top of the income distribution.
What would happen if the Child Tax Credit is expanded? Currently, 27 million children under age 17 live in families that do not receive the full $2,000 per child credit. TPC estimates that if the Child Tax Credit (CTC) is made fully refundable and expanded so all low-income families receive $3,000 per child ages 6 through 17, or $3,600 per child under 6, those families would receive an average credit increase of $3,400.
The IRS may have awarded millions of dollars in tax deductions in error. The Tax Cuts and Jobs Act allows pass-through entities like sole proprietors and partnerships to take a qualified business income deduction. But according to a report released last week from the Treasury Inspector General for Tax Administration, the IRS allowed those entities to claim $57 million in “potentially erroneous” deductions on 12,980 tax returns filed in 2020.
NY investigators already have some of former President Trump’s tax records. Manhattan District Attorney Cyrus Vance, Jr., already has some information about the records he requested from Trump’s accounting firm Mazars USA, but the information did not come from Mazars. The US Supreme Court still is weighing whether Mazars must give Vance tax records from 2011 to 2018. It is unclear whether Vance already has enough information to support allegations that Trump’s company overstated the value of its assets for loan purposes and fraudulently reduced income for tax purposes.
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