Will there be a SALT-free infrastructure bill? The $2 trillion infrastructure plan President Biden unveiled last week includes multiple tax increases on corporations as well as billions of dollars in clean energy credits. To the dismay of some Blue State Democratic lawmakers, it does not include repeal of the Tax Cuts and Jobs Act’s $10,000 cap on state and local tax deductions. Speaker Nancy Pelosi is hopeful that the final bill will.
Will President Biden make good on his promise to raise corporate taxes? TPC’s Howard Gleckman looks at how Biden plans to keep his campaign promise to raise taxes on big corporations. Biden’s proposed corporate tax rate increases might fund his newly announced $2 trillion infrastructure plan, but the White House says it would take 15 years. TPC’s November 2020 analysis, Biden’s corporate tax initiatives would raise more than $1 trillion from 2021 to 2030 and an additional $1.8 trillion in the subsequent 10 years. The question: Will Congress approve such large tax increases?
This Wednesday: Can the IRS administer a complicated tax system on its reduced budget? After a decade of large funding cuts, the IRS faces extraordinary challenges administering a complicated tax code. TPC’s fifth annual Donald C. Lubick Symposium will explore these challenges. US Tax Court Chief Judge Maurice Foley will speak, followed by a panel of experts who will delve into the impact of the IRS’s budget cuts on its compliance programs for large businesses. Learn more and register here for the noontime event.
How well is the IRS delivering a retroactive tax break on unemployment compensation? Under the American Rescue Plan (ARP) that Congress passed last month, filers with $150,000 or less in adjustable gross income can exempt the first $10,200 of 2020 unemployment compensation from federal income tax. But many filed returns before the ARP became law. The IRS announced that it will automatically issue refunds to those filers and TPC’s Janet Holtzblatt gives the agency a good grade for its efforts. But the IRS could do a far better job in explaining its process to taxpayers. It did not help that Congress changed the tax law in the midst of tax filing season.
Did Congress err by making those unemployment benefits tax-free while reducing future assistance? Yes, according to TPC’s Gene Steuerle, Gordon Mermin, and Noah Zwiefel. A new TPC analysis finds that higher-income households mostly benefit from Congress’s decision to combine reduced federal jobless benefits with the tax exclusion. The trade-off was a bad deal for the lowest income households, who need aid the most.
A few more states delay tax filing deadline. Arizona and Iowa join the federal government and most states by delaying their tax filing deadlines from April 15 to May 17. Last week, Idaho made its delay official.
ITEP reports at least 55 big US corporations paid no federal income tax last fiscal year. Based on the firm’s financial reports, The Institution on Taxation and Economic Policy says the firms paid no tax even though they reported almost $40.5 billion in pre-tax profits in 2020. The Biden Administration wants large companies to pay a minimum tax on the book income they report to shareholders.
In case you missed your TPC Prescription… Last Thursday, TPC’s Howard Gleckman talked with University of Michigan economist Joel Slemrod and Michael Keen, deputy director of fiscal affairs at the International Monetary Fund about their new book Rebellion, Rascals, and Revenue. They discussed how the weird and sometimes gruesome history of taxation applies to economic policy in the COVID-19 era. You can watch it here.
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