Storms ahead for the President’s climate change initiative. Sen. Joe Manchin of West Virginia has pushed back on a key element of the president’ climate agenda. The Clean Energy Performance Program would reward companies that increase their clean energy supply by 4 percent each year and penalize those that don’t. That would include the coal industry that Manchin is trying to protect.
(Re-)Enter the carbon tax… Some Senate Democrats are now focusing on an alternative: A tax on carbon dioxide pollution. Senate Finance Committee Chairman Ron Wyden may propose a domestic carbon tax starting at $15 to $18 per ton of emissions. Coal mining companies, large natural gas processing plants, and oil refiners would pay the tax but gasoline production may be exempt to protect American drivers from paying higher prices at the pump. Revenues would support tax rebates or assistance for lower-income workers, especially those employed in the fossil fuel industry.
Virtual event on Wednesday, October 27: US Energy Tax Policy and Climate Change. TPC and the Brookings Institution Center on Regulation and Markets will bring together climate and tax policy experts to examine recent policy proposals. Catherine Wolfram, deputy assistant Treasury secretary for climate and energy economics, will explain the Biden administration’s climate strategy. Following her keynote, an expert panel will discuss US energy tax policy. Learn more and register here.
IRS rethinks FAQs. The agency often relies on a Q&A format to provide guidance to taxpayers before it adopts formal rules and regulations. The agency said it would make the process of developing the FAQs more transparent. It also said that taxpayers who rely on FAQs in reasonable good faith will have a “reasonable cause” defense against any negligence penalty or other accuracy-related penalty if the FAQ turn out to be an incorrect statement of the law.
House Budget Committee chair John Yarmuth will retire. The long-time Kentucky Democrat, 74, said he’ll step down at the end of his term in January. Yarmuth has been a key player in ongoing complex budget reconciliation negotiations among Democrats.
Voters still seem to like taxing the rich. A poll by Vox and Data for Progress conducted October 8-12 finds that 71 percent of voters support raising taxes on the richest 2 percent of Americans to pay for the $3.5 trillion social spending bill currently under consideration in Congress. The survey finds 86 percent of Democrats and 50 percent of Republicans support the idea. And overall, 65 percent support tax increases on corporations and capital gains.
Worried about taxpayer privacy? Synthetic data may be an answer. Sens. Mike Crapo and Chuck Grassley requested an investigation into how the IRS conducts research, especially its sharing of public use files (PUFs) that the senators say could have been the source of ProPublica’s recent reporting on confidential tax information of wealthy Americans. TPC’s Len Burman describes how he and others at the Urban Institute are working with IRS Statistics of Income staffers to create a “synthetic” PUF that produces data that look like tax returns but are safe to release to researchers. He writes that “we also are developing a safe way for researchers to access the underlying tax data without ever seeing any actual tax returns and with a strong guarantee that published statistics will not inadvertently reveal confidential information about any taxpayer.”
Why did South Dakota turn into a tax haven? TPC’s Howard Gleckman wonders why states like South Dakota allow publicly chartered perpetual trusts to operate. In South Dakota alone, these trusts shield $367 billion in assets from state income taxes and federal estate and gift taxes. “These tax havens generate almost no tax revenue and create few, if any, jobs. But because the states suffer no revenue loss there is no incentive for accountability….While [the states] may have nothing to lose, the rest of us do.”
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