Corporations are willing to pay a tax penalty for high executive compensation. The Wall Street Journal found (paywall) big corporations seem willing to pay a tax price to keep highly compensated executives happy. It found that 36 companies in the S&P 500 paid a combined $2.1 billion in taxes on nondeductible compensation over the past three years, up from $480 million in 2019 and $850 million last year. The 2017 tax law barred firms from deducting more than $1 million in pay for each top exec. Compensation consultants told the Journal that the rising tax bills rarely affect C suite pay.
The IRS has a new five-year plan. The agency’s strategic plan hits all the right buttons: Better taxpayer service, stronger enforcement, updated technology, enhancing digital services, and more effective recruiting. But how much can it do without sufficient resources? And given limited funds, which of its many goals will get top billing?
Indiana Senate GOP favors suspending some sales taxes instead of giving refunds. Senate Republicans will introduce a bill in an upcoming special session to suspend Indiana’s 7 percent sales tax on electricity, water, gas, internet and phone bills. The $260 million plan would replace Gov. Eric Holcomb’s proposed $225 tax refund.
No more “newcomer tax” in Allegheny County. School districts have been appealing assessments on new home sales to increase property tax revenue. After homeowners sued, a county judge rolled back assessment increases on 10,000 newly-bought homes. The judge has asked for the implications of reversing assessments going back to 2018.
European Central Bank raised its interest rate for the first time in 11 years. The bank raised the benchmark rate by 0.5 percent, to 0 percent. Inflation in the eurozone is currently 8.6 percent. This ends 8 years of negative interest rates that had been in place to encourage lending, spending, and investment during the region’s sovereign debt crisis. The moves reflect an attempt to reduce inflation in the eurozone.
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].
