Getting antsy on the CTC

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Jan 18, 2022 View in browser   By Bernie Becker THE FALLOUT CONTINUES: It's now several days after tens of millions of families didn't receive a monthly child allowance for the first time in six months. It's also hard to say who or what is going to give first on the Child Tax Credit — the White House and the many congressional Democrats who want the expanded incentive to be a key part of President Joe Biden's Build Back Better agenda, or Sen. Joe Manchin (D-W.Va.), who has concerns about offering payments without work requirements and to those higher up the income ladder. But in the meantime, rank-and-file Democrats are getting antsy. House Democrats facing competitive races this fall have started pressing their leadership to break off chunks of the party's big tax-and-spend legislation — like those monthly child payments — and hold individual votes on them as they wait on the White House and the Senate, The Washington Post's Marianna Sotomayor reports. But we'll see: Those House Democratic leaders might be wary of undercutting the party's chances at the big deal. Meanwhile, over in the Senate, Democrats are pooh-poohing the idea of working with Republicans on an expanded child credit, instead of trying to wear down Manchin. Sen. Mitt Romney (R-Utah) has his own bill that hits many of the same notes as the Democrats' monthly child payments, and other Republicans have said they're interested in the idea. (Though far from all of them: Other GOP lawmakers have said the monthly payments make it harder for businesses to hire workers.) Still, getting big bipartisan measures across the finish line during an election year is always easier said than done — leading the Democrats who have been long-term backers of expanding the child credit to believe that might be more of a long-term project. (Among the questions for a potential bipartisan deal: What are the offsets?) Restoring the monthly payments is "obviously something that's going to have to be done at least for the moment by Democrats," Sen. Michael Bennet (D-Colo.) told Roll Call's Laura Weiss and Lindsey McPherson. MORE IN A BIT, but first thanks for reading a "running in place" version of Morning Tax. Though speaking of going places: Credit to Eli Manning and his crew for singing Olivia Rodrigo with all the enthusiasm of Morning Tax's daughters. Honestly, we can appreciate low-scoring sports: Today marks 136 years since what's considered the founding of modern field hockey, with the formation of the Hockey Association in England. Pass those scoops this way. Email: bbecker@politico.com, alorenzo@politico.com, bfaler@politico.com and teckert@politico.com. You can also reach us on Twitter at @berniebecker3, @aaronelorenzo, @tobyeckert, @Brian_Faler, @POLITICOPro and @Morning_Tax.   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.     Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. KIND OF A MESS, REALLY: It's also no big secret that both pillars of the global tax deal pushed by Biden face their challenges in Congress. Complying with Pillar Two, the corporate minimum tax, long seemed to be the easier part for Democrats — even though a smattering of centrists had raised concerns about strengthening America's existing levy on global intangible low-taxed income, or GILTI. But the Democrats' proposed GILTI changes will remain stalled as long as the party can't find an agreement on the current sticking points in the climate and safety net package — and if that turns out to be a long-term problem, it could cause just one more complication for the deal that was negotiated through the Organization for Economic Cooperation and Development. Plus, that's not even getting into Pillar One, which seeks to allocate corporate profits more based on where a company's sales are located. Senate Republicans insist that complying with that part of agreement requires changing tax treaties, while the Biden administration suggests otherwise. Either way, it's not at all clear that the Senate will get around to making those changes in an election year as it is. For better or worse: Europe is having its own hiccups in getting the global deal into place, Bloomberg noted. President Emmanuel Macron of France wants to make the implementation of the minimum tax a top priority during his country's six-month presidency of the EU, something he also believes will help him during elections in the spring. But a decent chunk of other EU members — Bulgaria, Estonia, Malta and Sweden — believe Brussels is rushing too much on the minimum tax, by trying to get it into effect in 2023. Meanwhile, Hungary and Poland have joined three of those countries in worrying that the work on the minimum tax isn't tied to progress on that first pillar — which has always been more of a priority for many on the continent, given that they hope it will revamp how digital companies are taxed. In any event, this all will be a topic of conversation for finance ministers from the region when they meet in Brussels today, though EU officials do appear worried that waiting too long on implementing the minimum tax could mess up the timeline for the entire OECD deal. Which isn't to say everything is stuck in Europe: Germany's new government wants to have its minimum tax into place within a year , according to the German magazine WirtschaftsWoche (via Bloomberg). Meanwhile, Switzerland said last week that it would have a minimum tax by 2024 — no small deal, given the country's reputation for corporate-friendly governance. Finance Minister Ueli Maurer later said that individual cantons already are preparing to lower taxes on the well off once the minimum tax is in effect, in order to protect their pro-business reputations, according to the Swiss newspaper NZZ am Sonntag (once more via Bloomberg.) Around the World RECONSIDERING THE OPTIONS: The Romanian government is thinking about dropping a tax on offshore gas projects that has proven to be a hindrance to projects in the Black Sea, Reuters reports. Energy Minister Virgil Popescu said the tax would likely be scrapped in an upcoming session of parliament, though companies would still face a requirement that two-fifths of production remain in Romania. The offshore gas tax is actually the last remaining part of a package of energy restrictions that were put into place in Romania. All three parties in the country's current governing coalition want to at least change the tax, which was implemented four years ago and which government officials say has made a planned transition from coal to gas more difficult. Several big producers have spent years preparing for Black Sea projects, but have held back because of the offshore tax — a situation that has cost Romania revenue as well, according to Popescu.   DON'T MISS CONGRESS MINUTES: Need to follow the action on Capitol Hill blow-by-blow? Check out Minutes, POLITICO's new platform that delivers the latest exclusives, twists and much more in real time. Get it on your desktop or download the POLITICO mobile app for iOS or Android. CHECK OUT CONGRESS MINUTES HERE.     Around the Nation "ACTION," INDEED: Georgia handed out a record $1.2 billion from a tax credit for film and television production during its most recent fiscal year, as Forbes noted. A fair number of states hand out film and TV incentives, in a competition to lure new productions. But Georgia's credit might be the most generous of all — both California and New York, for instance, issue no more than $420 million in production credits each year, and other states like New Jersey place a cap at around $100 million. The $1.2 billion was close to double the $649 million in film credits that Georgia issued in 2020, the year the pandemic took hold. Georgia had set a record of $860 million worth of credits back in 2019. A variety of fiscal experts have criticized the scope of Georgia's film credit policy, and putting a cap in place is just one of the ideas for limiting the incentive. But the race is still on: "California Is Doubling Efforts to Preserve Film and TV Production," The New York Times noted. Quick Links Bloomberg: "NFT Investors Owe Billions in Taxes and IRS Sets Sights on Evaders." Oxfam: "Tax rich to fund vaccines for poor hit by pandemic," via the AP. CNBC: "Bitcoin millionaires are moving to Puerto Rico for lower taxes and island living." Did You Know? Seven countries in all — Bulgaria, Georgia, Moldova, Romania, Russia, Turkey and Ukraine — border the Black Sea.   Follow us on Twitter Toby Eckert @tobyeckert Bernie Becker @berniebecker3 Brian Faler @brian_faler Aaron Lorenzo @aaronelorenzo   Follow us

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