Another reconciliation push. House Republicans released a $95 billion budget framework that would begin the reconciliation process for another party-line funding bill. The House Budget Committee, led by Chair Jodey Arrington (R-TX), is scheduled to consider the resolution today. It would allow up to $73 billion for military and intelligence programs, $12 billion for farm assistance, and $10 billion for election-related initiatives. Some Republican fiscal hawks want at least part of the spending offset, leaving the resolution’s Budget Committee approval uncertain.
Treasury’s top tax official plans to leave. Kenneth Kies, who serves as both assistant Treasury secretary for tax policy and acting IRS chief counsel, is expected to leave the department (paywall), although his final day has not been announced. Kies has overseen Treasury’s implementation of last year’s budget reconciliation act and approximately 2,000 attorneys working in the IRS Office of Chief Counsel. His departure would leave both positions without permanent leaders and adds to recent turnover at Treasury and the IRS. Three of the five deputy assistant secretary positions in Treasury’s Office of Tax Policy also are vacant or filled by acting officials.
Better service and better data could help close the tax gap. TPC’s Peter G. Peterson Foundation Fiscal Intern Olu Rouse reviews research presented at this year’s IRS/TPC Joint Research Conference on Tax Administration. Across four sessions, researchers found that improving compliance requires more than increasing the number of audits. The IRS also can make it easier for taxpayers to follow the rules, obtain better information before returns are filed, target audits more effectively, and study how taxpayers respond after enforcement actions. Together, the findings suggest that the tax gap reflects not only taxpayers’ willingness to comply but also how well the tax system is designed and administered.
Missouri voters will consider replacing income taxes with broader sales taxes. An August ballot measure in Missouri would amend the state constitution to allow lawmakers to eliminate the individual income tax and expand sales taxes to goods and services that are currently exempt, potentially including health care spending. Income taxes provide nearly two-thirds of Missouri’s general revenue, or about $8.7 billion in 2026. A spokesperson for Gov. Mike Kehoe (R-MO) said Kehoe would not support extending sales taxes to health care, agriculture, or real estate.
Philadelphia expands collection of its local online sales tax. Businesses located outside Philadelphia that sell eligible products online to city residents will now collect the city’s 2 percent sales tax in addition to Pennsylvania’s 6 percent state tax. City officials expect the change to raise about $1.5 million annually while placing online sellers outside the city on more equal footing with local businesses.
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