| | | | |  | | By Bernie Becker | GOING AROUND THE STATES: It's been pretty clear for awhile now that tax cuts are all the rage in the states this year. But if anyone needed any final confirmation, just take a look at New York and Illinois. Those two big, blue states both approved budgets over the weekend with extensive tax cuts, following the trend of other states who have seen a healthy jump in revenues over the past year. In New York, Gov. Kathy Hochul and the Democratic legislature agreed to suspend some of the state's gas taxes for a full seven months, starting in June and lasting through the rest of 2022, while also accelerating previously in place tax cuts for middle-income people. And over in Illinois, Gov. J.B. Pritzker and the Democratic legislature agreed to a full $1.8 billion in tax cuts — largely through temporary provisions that will, coincidentally or not, run not much past November's elections. Those tax cuts include direct payments to for married couples making up to $400,000 a year and a suspension of the state tax on groceries, while Illinois will also hold off on a planned increase in the gas tax. What's particularly interesting about those particular blue states cutting taxes is that key Democrats in both New York and Illinois have pushed to raise taxes, often successfully, in years past. It's no wonder that Illinois and New York joined so many other states in cutting taxes. The Urban Institute recently noted that state revenues grew some 18 percent between April 2021 and February 2022, when compared to that same time span a year prior. But it's also interesting to note that both those states also leaned on temporary tax cuts, while more red (and frequently Southern) states pushed for permanent tax cuts this legislative season. From Urban's perspective, "state legislatures should not rush into enacting permanent tax cuts based on what very well might be temporary growth in real revenues." The entire trend hasn't gone unnoticed, either. For instance, via USA Today: " States' 'flat tax' mania: Better for taxpayers or another gift to billionaires?" Also worth checking out: The Tax Foundation broke down as much of the tax legislative action around the states as it could. MORE MORNING TAX in a bit, but first thanks for coming to the "is it Spring break yet?" version. We found our beach reading: Taxes and soccer! Not because it was getting stale: Today marks 36 years since Kellogg's stopped giving tours of its cereal plant in Battle Creek, Mich., after some 6.5 million people over 80 years got to see how Corn Flakes were produced. (Kellogg's executives said they had no choice but to end the tours, because rival cereal makers were using them in search of competitive advantage.) Help this newsletter really (snap, crackle and) pop. Send your best scoops. Email: bbecker@politico.com, bfaler@politico.com and teckert@politico.com. You can also reach us on Twitter at @berniebecker3, @tobyeckert, @Brian_Faler, @POLITICOPro and @Morning_Tax.
| | | | DON'T MISS ANYTHING FROM THE 2022 MILKEN INSTITUTE GLOBAL CONFERENCE: POLITICO is excited to partner with the Milken Institute to produce a special edition "Global Insider" newsletter featuring exclusive coverage and insights from the 25th annual Global Conference. This year's event, May 1-4, brings together more than 3,000 of the world's most influential leaders, including 700+ speakers representing more than 80 countries. "Celebrating the Power of Connection" is this year's theme, setting the stage to connect influencers with the resources to change the world with leading experts and thinkers whose insight and creativity can implement that change. Whether you're attending in person or following along from somewhere else in the world, keep up with this year's conference with POLITICO's special edition "Global Insider" so you don't miss a beat. 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. ACROSS THE POND: It kind of looks like an old-fashioned political tax scandal. Rishi Sunak, the U.K.'s chancellor of the exchequer, has been under some political pressure for days now, ever since the news media reported that his wife, Akshata Murty, was non-domiciled in Britain — basically meaning she doesn't have to pay domestic taxes on her overseas income. (Murty's father founded the Indian technology company Infosys, of which she owns £700 million in shares.) Sunak has asked Prime Minister Boris Johnson to allow the independent adviser on ministerial interests, which checks for potential conflicts of interests, to examine his case, as the BBC noted. In the meantime, Murty has said she will start paying taxes on her overseas income, and Sunak's family has moved away from Downing Street. GREAT SCOTT: Sen. Rick Scott's proposal to have more people who don't pay income tax have "skin in the game" is becoming an issue in GOP Senate primaries, it seems. Mike Gibbons, one of several Republicans running in Ohio, is coming under fire for something he said last fall — that the wealthy pay the lion's share of income taxes in the U.S., and thus "the middle class is not really paying any kind of a fair share," as the Columbus Dispatch noted. Gibbons' team says he doesn't want to raise taxes on anyone, but those comments from last year have taken new life after Scott's proposal — which has drawn criticism from a wide range of fellow Republicans, including Senate Minority Leader Mitch McConnell. The comments certainly have the attention of Gibbons' rivals. "You recognize that Amazon, Google, Facebook, Apple, they pay a lower tax rate than any middle-class Ohioan. Why are we raising taxes on middle-class Ohioans?" J.D. Vance said recently. A LITTLE BBB TALK: What's former Treasury Secretary Larry Summers' favorite part of President Joe Biden's Build Back Better agenda? It might actually be the update to America's international tax provisions, meant to put the U.S. more in line with the global tax agreement that Biden helped clinch last year. "We negotiated a historic agreement to enable the world to tax global corporations, which it was losing the ability to do. And that agreement could fail if we don't do our part to implement the U.S. measures that are part of it," Summers said on NBC's "Meet the Press."
| | | WHAT'S A STAPLE, REALLY? Peru is trying to cut taxes on core food items to help people struggling with inflation. But as Bloomberg notes, officials there are struggling to figure out what should be in the basket of foods that get a tax cut. The government originally sought to scrap a sales tax known as IGV on staples like eggs and bread. But once lawmakers got a hold on the measure, more kinds of food got included in the tax cut — like fillet steak, goose, guinea fowl, pheasant and ravioli. Prime Minister Anibal Torres took to Twitter on Saturday to stress that President Pedro Castillo's government wasn't pleased with that expansion, saying that the foods lawmakers eliminated the IGV on "don't form part of the consumption basket of low-income people." Torres added that he would work with Congress on tweaking the tax cut, because he doesn't want to lose too much revenue and then undercut key services.
| | | | INTRODUCING DIGITAL FUTURE DAILY - OUR TECHNOLOGY NEWSLETTER, RE-IMAGINED: Technology is always evolving, and our new tech-obsessed newsletter is too! Digital Future Daily unlocks the most important stories determining the future of technology, from Washington to Silicon Valley and innovation power centers around the world. Readers get an in-depth look at how the next wave of tech will reshape civic and political life, including activism, fundraising, lobbying and legislating. Go inside the minds of the biggest tech players, policymakers and regulators to learn how their decisions affect our lives. Don't miss out, subscribe today. | | | | | | | | GIVE IT A BOOST: A new proposal in California would ratchet up the state's tax credit for renters for the first time in well over a generation, The Los Angeles Times reports. As it stands, renters making less than around $43,500 a year get a $60 credit each year, and married couples making up to twice that amount can get a $120 credit. It's basically the same credit that California has had on the books since 1979, with not even any adjustments for inflation. But one Democratic lawmaker in Sacramento is floating the idea of giving a $500 credit for single filers and $1,000 for married couples and single filers with dependents. Not only that: The proposal from state Sen. Steve Glazer, a Democrat, would make the credit refundable, meaning California would likely be paying out more during next tax season. Rents in California are currently 44 percent higher than the median in the U.S., while household incomes are 22 percent higher.
| | | NYT: "Crypto Industry Helps Write, and Pass, Its Own Agenda in State Capitols." The Hill: "Accusation of tax fraud in France is latest black eye for McKinsey." KOMO: "Lawmakers pushing WA capital gains tax regardless of judge ruling it unconstitutional."
| | | Snap, Crackle and Pop first became mascots for Rice Krispies in 1933.
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