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Ukraine Aid, Wealth Taxation, And A Retroactive SALT Workaround


Biden proposes $33 billion in Ukraine aid. President Biden’s bid for $33 billion in new military and humanitarian aid to Ukraine likely will pass Congress, but first could get tangled in other contentious issues. Some Democrats want to add more funding for COVID-19 medications and testing to the bill, which would renew a fight with Republicans over immigration policy. Will any other unrelated measures try to ride on the Ukraine bill? 

Expanding the CTC: It wouldn’t take much for Congress to help very low-income families. TPC’s Elaine Maag and Lillian Hunter review five ways  Congress could expand the Child Tax Credit. Some would more effectively target benefits to the lowest income families than others. 

Register and tune in Monday: Wealth taxation as a tool of democratic reform. If the wealthy exert an outsized influence on politics, can taxing wealth improve democracy? TPC will host an event with Jeremy Bearer-Friend of George Washington University Law School and Vanessa Williamson of the Brookings Institution, who recently co-authored a paper on the issue. Other speakers include Phyllis Taite of Oklahoma City University School of Law, who will discuss the effects of wealth taxation on the racial wealth gap and Rakeen Mabud of the Groundwork Collaborative on how a wealth tax might prompt a rethinking of economic policy. Register for the event here

How about tax relief for auto dealerships? A bipartisan group of lawmakers wants to cut taxes for auto dealerships struggling with supply chain-related inventory problems. Treasury can offer tax relief to companies whose inventory falls because of a trade embargo, but not because of pandemic-induced factory closures. The proposed legislation would give the dealers new flexibility in how they treat inventory swings for tax purposes. Supporters want to include the measure either in a bill to boost US competitiveness with China or any year-end effort to extend  expiring tax breaks. 

Colorado lawmakers advance a retroactive SALT cap workaround. The bill would make a workaround to the federal $10,000 cap on state and local tax deduction retroactive to 2018. The state’s original fix was only effective beginning this year. Retroactivity would require tens of thousands of files to amend their tax returns….Fun times for the Colorado Department of Revenue.

Federal judge dismisses a challenge to Washington State’s long-term care tax. Three businesses challenged the state’s mandatory payroll tax to fund a now delayed long-term care program. They claimed the tax violates federal law, which forbids a state from requiring employees to participate in a plan that provides sickness or medical benefits. A federal judge ruled he had no jurisdiction and said any suit had to be filed in state court. In the meantime, the state has addressed several of the issues raised in the lawsuit. 

Connecticut budget deal includes a gas tax holiday extension and other tax cuts. Gov. Ned Lamont and General Assembly Democrats agreed on a revised one-year  budget that includes cuts taxes of nearly $600 million. One provision would give  families with children a tax reduction of up to $750. The budget also extends Connecticut’s gas tax holiday through Dec. 1.

 

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at dailydeduction@taxpolicycenter.org.



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