Navigating the Reconciliation Bill | Tax Policy Center
A Democratic-only social spending bill gains Manchin’s support. West Virginia Senator Joe Manchin told MSNBC that he’s always assumed Democrats would need to use reconciliation to pass a second, larger bill aimed at supporting families. He says he’d support such a Democratic-only social spending measure, but says it shouldn’t be linked to a separate bipartisan infrastructure measure.
But what will be in it? As House appropriators start working on next year’s spending bills, they must work out vast difference between progressives, who want to spend far more than moderates. Senate Budget Committee Chair Bernie Sanders says he wants $6 trillion in new spending over the next decade. Moderates say total new spending should be closer to $2 trillion.
Paying for infrastructure with pixie dust. TPC’s Howard Gleckman finds less than meets the eye in the proposed funding for the public works plan that Biden and a bipartisan group of senators have agreed to. Faced with GOP resistance to corporate tax hikes and the president’s refusal to raise taxes on households making less than $400,000, and uninterested in spending cuts, Biden and the senators took the easy way out. They’ll mostly end up borrowing the money.
Ohio passes a budget, with tax cuts. State lawmakers sent the two-year $75 billion fiscal plan to Governor Mike DeWine this week. It includes a $1.64 billion across-the-board individual income tax cut of 3 percent. The budget also eliminates the top income tax rate for the state’s wealthiest residents.
No refunds for businesses’ pandemic-related sales taxes in Michigan. Both legislative chambers passed bills to allow businesses to seek refunds for taxes they paid on personal protective equipment, disinfectants, and plexiglass barriers during the coronavirus pandemic. But Governor Gretchen Whitmer vetoed them, saying they’d cost the state an estimated $18 million annually. She said she would rather create a direct grant program with federal money.
Vermont joins the pink tax exemption bandwagon. Starting July 1, Vermont residents will no longer pay sales tax on feminine hygiene products. The sales tax exemption will cost Vermont $685,000 in tax revenues that would have otherwise gone to the state’s Education Fund. While the state’s fiscal analysis says the revenue loss will be stable in the near term ”Vermont’s aging demographics are expected to put downward pressure on the future demand for these products.”
Argentina: Raise the proposed minimum global corporate tax rate. The Group of 7 agreed to a 15 percent minimum global corporate tax rate. But Argentina’s finance minister Martin Guzman is leading some developing countries in a push for a higher rate. “We advocate for more than 15 percent, certainly not less than 21 percent and 25 percent would be even better.”
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