North Carolina suspends gas tax through November. North Carolina Gov. Josh Stein (D-NC) signed legislation suspending the state’s 41-cent-per-gallon gas tax through Nov. 30. The state will use money from its Stabilization and Inflation Reserve to replace the lost revenue so transportation funding is not reduced. The law also allows farmers to use red-dyed diesel on highways through the end of the year. Republican legislative leaders said they will revisit gas prices when lawmakers return in mid-November and could consider extending the suspension.
New paper proposes nearly $15 trillion in tax reforms over a decade to reduce federal debt. Kimberly Clausing and Natasha Sarin outline a package of tax changes they estimate would raise $14.6 trillion from 2030 through 2039. Their proposals include corporate and international tax changes, additional IRS funding, new taxes on gambling and carbon emissions, higher individual income tax rates and repeal of the Section 199A deduction, and higher taxes on capital income. The authors estimate that a smaller $7.5 trillion package would roughly stabilize the debt-to-GDP ratio through the mid-2050s, while the full package would reduce it to about 57 percent by 2056.
Illinois gambling tax revenue reaches record $2.7 billion. Illinois collected a record $2.7 billion in gambling-related revenue last fiscal year, up 19.2 percent from the year before and 90 percent from fiscal year 2019. Video gambling generated more than $1 billion in state and local tax revenue, while sports wagering produced $593 million in state taxes after more than $15 billion was wagered. The state report expects revenue to continue growing as new casinos open, Chicago allows video gambling terminals, and sports wagering expands.
Higher SALT cap creates a marriage penalty for some couples. The higher federal deduction for state and local taxes (SALT) is prompting some high-income couples to reconsider whether getting legally married makes financial sense, reports Bloomberg (paywall). The SALT deduction is capped at $40,400 in 2026 for both single filers and married couples, meaning two unmarried taxpayers can potentially deduct twice as much as a married couple. The higher cap begins to phase down once modified adjusted gross income exceeds $505,000 and will revert to $10,000 in 2030 under current law.
Itemized: Fact of the Week. Making the higher cap on the state and local tax (SALT) deduction permanent would reduce federal revenue by about $258 billion from 2027 through 2036, according to TPC estimates. Under current law, the higher cap expires after 2029 and returns to $10,000. Extending it would have no additional revenue effect through 2029, but would reduce federal receipts by $18.5 billion in 2030, with the annual cost rising to nearly $44 billion by 2036.
The Daily Deduction will post weekly until November, when Congress returns from its recess.
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