Biden signs on to the bipartisan infrastructure framework. After meeting with 5 Republican and 5 Democratic Senators, Biden announced his support for their $1.2 trillion spending plan on roads, bridges and other traditional infrastructure. The plan includes no tax increases, according to a White House fact sheet, but does include an unspecified amount of revenue from “reducing the tax gap.” No increase in motor vehicle taxes or fees. Five GOP senators agreed to the plan but it will need at least 10 to pass the chamber. Senate Majority Leader Chuck Schumer still is preparing an alternative Democrats-only bill.
And there is another shoe to drop. The bipartisan group’s proposal excludes many key Democratic priorities and the House Speaker Nancy Pelosi wants to see a second bill that addresses those issues before she moves this one. She says, “we will not take up a bill in the House until the Senate passes the bipartisan bill and a reconciliation bill.” That second bill likely would include many of Biden’s proposed tax increases on high income households and corporations. It still will require support from all 50 Senate Democrats since there is little chance any Republicans will support it. Pelosi’s vow will make moderates unhappy but is necessary to win the support of progressives.
Would repealing SALT cap make it easier to tax the rich? TPC analysis shows that repealing the federal $10,000 cap on state and local tax deductions would disproportionately benefit those with annual incomes exceeding $500,000. But some congressional Democrats from high-tax jurisdictions now say repealing the cap would make it easier for states to tax the rich and deliver government benefits to middle-income households.
Will Wisconsin finally get rid of its personal property tax? Maybe sooner rather than later: Two legislative committees support repealing the state’s personal property tax. The levy, as old as Wisconsin itself, has been on the books since 1848. It originally applied to all personal property but now is paid only on limited categories of business property. The Legislative Fiscal Bureau reports that about 2 percent of the state’s tax revenue in 2019-2020 came from the tax, down from more than 10 percent in a half century ago.
Wicked bad Massachusetts tax fight. The Boston Herald reports on the battle over the coming November ballot measure to approve a millionaire’s tax. The 4-cent surtax on all state income over $1 million would level the playing field, say supporters. No, it will scare off the state’s highest earners, insist opponents.
As for billionaires who enjoy tax advantages, there’s always a Roth IRA—or charitable donations, for now. ProPublica reports that Peter Thiel, billionaire cofounder of Paypal who opposes higher taxes, had $5 billion in a tax-free Roth individual retirement account in 2019. Separately, billionaire Warren Buffett, head of Berkshire Hathaway who has given $41 billion to charity over the years, isn’t certain charitable donations should keep their tax advantaged status. He said, “It is fitting that Congress periodically revisits the tax policy for charitable contributions, particularly in respect to donors who get ‘imaginative.”
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].
