The budget deficit may reach nearly $3.12 trillion this year. The Biden Administration’s mid-session budget review projects the deficit for the fiscal year ending September 30 will hit $3.114 trillion, down about $550 billion from its May estimate and a bit lower than last year’s deficit of $3.129 trillion. This year’s deficit will reach 13.8 percent of the nation’s Gross Domestic Product, down from last year but still the second highest since World War II.
Will House Democrats let the White House suspend the debt limit? Roll Call reports they are considering a parliamentary maneuver to allow the White House to waive the federal borrowing cap unilaterally, while giving Congress the option to veto the waiver. This could protect lawmakers on both sides of the aisle from having to directly vote to lift the debt limit.
Corporate tax increases: Is Democratic support softening? Politico reports on the potential rift among Democrats. Many fear that proposals by the White House and others to increase a minimum tax on large companies’ profits go too far and put American firms at a competitive disadvantage.
TPC’s Prescription for understanding cryptocurrency taxation: Tune in Thursday. This week’s guest is Lisa Zarlenga, a partner at the law firm Steptoe & Johnson. She’ll explain the Senate’s controversial tax compliance rules for cryptocurrency investors and platforms as well as other proposals for taxing crypto. Register here for the noontime event.
Gas taxes: downs and ups. New Jersey’s motor fuel tax will fall from 50.7 cents per gallon to 42.4 cents on October 1. Gasoline consumption is up and state law requires adjustments to the tax rate to assure it raises $2 billion annually. Meanwhile Missouri’s gas tax will climb by 2.5 cents per gallon on October 1. A new state law raises the rate for each of the next five years until it reaches 29.5 cents per gallon.
What would extending more generous tax credits mean for the number federal income tax non-payers? TPC’s Howard Gleckman explains a new TPC estimate that finds the number of non-payers would rise, but only modestly. If the more generous refundable credits enacted earlier this year are extended, 45 percent of households would not pay federal income tax in 2022, compared to about 42 percent if the higher credits expire as scheduled. The largest percentage increase in non-payers would be among households with annual income between about $100,000 and $180,000.
Should Buffalo pay its NFL Bills? TPC’s John Buhl explains that Buffalo, New York, is stuck on an old question: How much public money should it spend to update the NFL’s Bills stadium? John concludes that “putting taxpayer dollars into higher-return public amenities could benefit Buffalo in ways a taxpayer-funded NFL team can’t.”
Congress is not in session. The Daily Deduction will post again on Tuesday, September 7, and then Mondays until it returns.
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