Congress will return next week with modest hopes. The Democrats’ effort to pass a budget reconciliation bill remains stalled. And that means a global minimum tax of 15 percent on corporate income, and measures to raise taxes on the wealthy, curb climate change, increase social spending, and reduce the deficit are similarly stuck. A small glimmer of hope: Sen. Joe Manchin tells Axios that his one-on-one talks with Senate majority leader Chuck Schumer on a compromise budget bill have been "encouraging."
How about a virtual VAT? A virtual landlord in Germany buys virtual property that he then rents to virtual tenants in the metaverse. Is the rent subject to the real German value-added tax? Aleksandra Bal of Stripe (reposted on Bloomberg Tax) reports the Tax Court of Cologne ruled that since the landlord provided services for which he was paid, the rent is taxable. But the Federal Tax Court reversed the decision, ruling that since the whole business has no value outside the virtual world, the landlord owed no tax. As far as we know, the judges are real, and not avatars.
Speaking of global issues, tune in on June 8 to a TPC program: “International Spillovers in Tax Policy.” Globalization means national tax issues are intertwined with international tax policies. Keynote speaker Rosanne Altshuler will discuss the roles played by home countries, host countries, and multinational corporations. One expert panels then will examine the effects of the US corporate tax on intellectual property location. A second panel will discuss how a well-designed carbon tax could minimize shifts in production to countries with lower carbon prices. Register and tune in here.
And tune in Thursday for The Prescription on racial inequities in the US tax code. Brooklyn Law School professor Steven Dean will discuss his latest research on racial inequities in the tax code. He and TPC’s Howard Gleckman also will discuss how policymakers should address the social safety net in the face of congressional gridlock over President Biden’s Build Back Better agenda. Register and tune in here for the noontime event on June 2.
Vermont Gov. Phil Scott signs tax cut package. Households making $125,000 or less will be eligible for a $1,000 per-child tax credit that will benefit over 30,000 children. The package also includes tax relief for low-income workers, caregivers, student loan payers, retirees and those receiving military pensions.
Gas tax holiday updates… New York State’s gas tax suspension will last from June through December and save drivers 16 cents per gallon. The Michigan Senate voted last week to suspend the state’s gas tax from June 15 through mid-September, and suspend sales and use taxes on certain fuels and commercial vehicles.
The Daily Deduction will resume its regular schedule on Monday, June 6, when Congress returns.
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].
