The Senate’s six-year highway bill inches forward, after dropping a Social Security provision. Majority Leader Mitch McConnell won 14 Democrats’ votes for the bill after he agreed to drop a $2.3 billion offset. The money would have come from barring people with felony warrants from getting Social Security benefits. The Senate will keep voting on amendment today and, perhaps, into the weekend. Twelve days, hath September, or else a shutdown, do you remember? On the other side of the Hill, Speaker John Boehner said the House will have to pass a stop-gap funding bill if it wants to avoid a government shutdown after September 30. Once it returns from its August recess, the House has only 12 legislative days to figure out how to keep the government open. A nasty dispute over confederate flags on federal property derailed recent House work on appropriations bills. Private equity firms: Uncovered. When their management fees are “disguised payments for services,” compensation for private equity managers can become “carried interest” that is taxed as capital gains--at a far lower rate than ordinary income. Under  a new rule, the IRS can start examining the firms’ books for disguised payments—such as those made when no entrepreneurial risk is involved—and pursue possible violations in a firm’s last three years of operations. The schemes cost the US hundreds of millions of dollars in lost tax revenue every year. Will low- and middle-income households pay lower taxes if Congress repeals the ACA Cadillac Tax? TPC’s Howard Gleckman explains results from a new TPC analysis by Gordon Mermin and Eric Toder. Support grows in Congress and among employers and unions to repeal the 40 percent excise tax on high-cost employer-sponsored health insurance plans. Backers of repeal say the tax would disproportionately hurt low- and middle-income workers. But the TPC analysis tells a somewhat different story.  Gleckman concludes: “Repeal would do little to benefit low-income households and on average help middle-income taxpayers only modestly.” In Massachusetts: Maybe a ballot measure to raise taxes on the wealthy. Labor unions, religious groups, and advocacy organizations are working together on a constitutional amendment that would replace the state’s flat income tax  with a two-tiered system. All earnings over $1 million would be tax 9.15 percent, earnings below that level would be taxed at the current rate of 5.15 percent. The initiative has to clear legal and political hurdles before getting on  the state ballot in 2018. In Michigan: Could nearly doubling the state corporate income tax pay for road repairs? Labor groups think that raising the state’s corporate rate from 6 percent to 11 percent would raise $900 million to help pay for road repairs. They’ve started a petition drive to get the proposal on the 2016 ballot. The state’s House Democrats proposed an increase in the corporate rate last week, but Republicans rejected it, saying it could drive companies to leave the state. Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, write us at dailydeduction “at” taxpolicycenter “dot” org.