Senate passes funding bill, punts Trump spending plan. The Senate passed a stopgap funding bill Saturday that would keep the government open through Dec. 11, sending the issue back to the House before the Oct. 1 shutdown deadline. The bipartisan 90-6 vote came as Senate Republicans also delayed action on a separate party-line spending bill sought by President Trump, which would boost defense funding, farm assistance, and election-related grants. GOP senators worried that moving the reconciliation package before the midterms could expose vulnerable Republicans to difficult amendment votes on food assistance, Trump’s proposed White House ballroom, and the $1.8 billion “Anti-Weaponization Fund.”
AI tax debate misses fiscal threat. TPC’s Tracy Gordon and Elena Patel argue that proposals to tax artificial intelligence have moved too quickly to “which tax?” before answering what lawmakers are trying to accomplish and what an AI tax can realistically do. They write that while AI could displace workers, increase inequality, and generate environmental harms, a narrow tax on AI would likely do little to address the nation’s broader fiscal problem. Even optimistic AI growth scenarios would leave federal debt rising significantly as a share of GDP. Gordon and Patel argue that lawmakers would be better off strengthening the taxation of capital income, where many AI-related gains are likely to accrue, rather than relying on a narrow, AI-specific tax.
IRS workers group joins audit immunity lawsuit. The National Treasury Employees Union, which represents career IRS auditors, has joined a lawsuit challenging the Trump administration’s tax audit immunity agreement. The amended lawsuit argues that Attorney General Todd Blanche, confirmed by the Senate last week, unlawfully agreed to provide President Trump and members of his family immunity from some tax audits as part of a settlement related to the disclosure of Trump’s tax returns. The lawsuit says the carve-out would give Trump and his relatives a benefit unavailable to other taxpayers.
Idaho conformity raises revenue concerns. Idaho’s conformity to the One Big Beautiful Bill Act could strain state revenues while providing relatively small average tax savings to most households, according to the Idaho Center for Fiscal Policy (paywall). Idaho conformed to the federal law earlier this year but decoupled from bonus depreciation and research expensing provisions. During legislative consideration, the bill was estimated to reduce general fund revenue by $155 million in fiscal 2026 and $175 million in fiscal 2027, though the full fiscal impact remains uncertain. The center argues that many of the law’s personal income tax deductions provide small benefits to most households while reducing revenue for schools, roads, public safety, and other services.
Advocates press Trump on oil windfall profits. Environmental and consumer advocates say President Trump should support a windfall profits tax on oil companies after he said oil companies are making “too much money” from higher prices tied to the Iran war. ExxonMobil and Chevron reported large second-quarter profits, and Trump said the companies “ought to give some of that back to the public.” Sen. Sheldon Whitehouse (D-RI) and Rep. Ro Khanna (D-CA) have proposed taxing oil companies’ windfall profits from the Iran-related price spike and using the proceeds to help families facing higher fuel costs. A White House spokesperson said Trump’s priority is lowering gas prices by expanding domestic energy production.
Who would be affected by a lower estate tax exemption level? TPC’s 2026 Peter G. Peterson Foundation Fiscal Intern Terrence "Olu" Rouse compares how different estate tax exemption levels would affect the number of taxable estates and federal revenue. Lowering the exemption from $15 million would increase both taxable returns and estate tax liability, but the effects would vary widely depending on the threshold. Proposals such as reducing the exemption to $10 million would have a much narrower reach than returning it to earlier-law levels, such as the 2009 or 2001 exemption amounts.
Itemized: Fact of the Week: The estate tax reaches very few estates under current law. TPC’s baseline estimates show that in 2026, when the estate tax exemption is $15 million, about 6,890 estate tax returns will be filed, and about 3,900 will be taxable. Estates worth more than $20 million account for 62.1 percent of taxable returns, but 94.9 percent of net estate tax liability. Overall, taxable estates will owe an average estate tax of $8.36 million, equal to 15.1 percent of average gross estate value.
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