This week on Capitol Hill and beyond. The House Ways & Means Committee will hold a field hearing in Minnesota on trade, agriculture, and supply chains today, while its Work and Welfare Subcommittee will hold a hearing Wednesday on the use of funds in the Temporary Assistance for Needy Families program. The Senate Budget Committee will hold a hearing Wednesday on Social Security. 

Moore vs. US: The US Constitution meets the Internal Revenue Code. This fall, the US Supreme Court will consider “Whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states.” Plaintiffs Charles and Kathleen Moore argue that the IRS taxed their “unrealized” income. TPC’s Tax Hound Renu Zaretsky unpacks the difference between “unrealized” and “realized” income, TPC’s Steve Rosenthal and University of Michigan law professor Reuven Avi-Yonah explain how the Court’s decision could upend our current tax code and hamstring future codes.

IRS hopes to expand IRIS next year. TaxNotes reports (paywall) on the agency’s planned effort to expand its information returns intake system (IRIS). The IRS launched IRIS in January to facilitate the filing of 1099 series forms. It hopes to have an assortment of new forms ready for free, online filing by the beginning of 2024, including forms to: report information on the exercise of stock options, transfer of stock purchased under employee plans, individual retirement account contributions, mortgage interest, bond tax credits, and certain gambling winnings. 

With a pen, Wisconsin Gov. Tony Evers slashes a Republican tax cut, boosts school revenue potential. The Democratic governor last week used the line-item veto to reduce a GOP-passed income tax cut from $3.5 billion to $175 million and deleted provisions that lowered rates for two of the brackets in the state’s tax code. He also increased the length of time that K-12 schools can raise tax revenue per student by centuries — the bill originally allowed schools to raise $325 per student for the 2023–24 and 2024–25 school years. Evers vetoed the “20” and the hyphen, making the provision end in the year 2425.

Democratic lawmakers in Massachusetts seek to tax colleges with legacy admissions. The bill focuses on endowment-rich colleges and universities — including Harvard and Williams — that demonstrate admissions preference for applicants whose parents attended the college. The tax would be based on a college’s endowment value per student, and revenue would be deposited in a trust that funds community colleges. For example, Harvard, with an endowment of $1.75 million per student, would face an annual tax of $103 million a year. The bill comes in the wake of the US Supreme Court decision that prevents colleges from considering a prospective student’s race in admissions. 

Orsted, Danish offshore wind developer, gets New Jersey tax break. Democratic Gov. Phil Murphy signed a bill last week allowing Orsted to keep federal tax credits, benefits from which it would have otherwise been required to pass along to New Jersey utility ratepayers. Lawmakers who supported the bill said the credits help Orsted deal with inflation and the effects of the COVID-19 pandemic. A Republican state senator estimates the value of the tax break to be nearly $1 billion.

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].