| | | | |  | | By Bernie Becker | Presented by the National Association of Manufacturers | WHERE DO WE GO FROM HERE? Well, that was certainly an eventful week for tax policy. Even the most pessimistic of analysts probably didn't think that Sen. Joe Manchin (D-W.Va.) would pull the plug last week on hundreds of billions of dollars' worth of tax increases on the better-off and corporations. But that very much looks like what happened, especially now that President Joe Biden is urging congressional Democrats to take Manchin's current deal on the table — prescription drug reforms and a couple years more of enhanced Obamacare subsidies. One of the questions, then, for those in the tax policy space is how many ripple effects will come from Manchin's deciding not to go ahead with a broader deal with Senate Majority Leader Chuck Schumer. Lots of people around town have been expecting some kind of tax agreement to materialize after the midterm elections, or at least for there to be serious discussions about one, no matter what Democrats were able to come up with on budget reconciliation. And now there are likely even more questions about how Democrats might approach tax matters later in the year, given how disappointed most of them will be that they couldn't accomplish more on battling climate change and taxing the rich this year. But does that mean Democrats will be more primed to push for whatever they can get on taxes once the elections are past? Or will many Democratic lawmakers recoil at passing tax provisions that they feel are second-best to priorities that also included the expanded child tax credit, on top of all those new taxes for business and the wealthy? MORE ON THAT IN A BIT, but we've got to ask: What does this week have in store for us? This much we know — Joel Embiid dancing the hora is pretty great. Cue your joke about too much pork: Today marks 86 years since the first ever Oscar Mayer Wienermobile made its debut. We love a meaty tip. Send them our way. 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.
| | | | A message from the National Association of Manufacturers: Manufacturers are driving our economy and helping to rebuild supply chains amid record cost increases and historic worker shortages. But tax increases on manufacturers pending before Congress do nothing to bring down costs, solve the workforce crisis or promote energy security. Learn why the National Association of Manufacturers is urging Congress to reject higher taxes at https://nam.org/taxaction. | | | LOOKING AHEAD: So what might be on the docket for a potential bipartisan tax deal come November or December? Key tax writers in both parties have been wanting to do a second retirement-security measure this year, on the heels of 2019 legislation, though there has been concern on the left that some of the leading proposals would be too generous to the rich. And if it's late in the year, chances are you're talking about tax extenders. In fact, several dozen temporary incentives already expired at the end of last year — more than a few of them clean energy provisions that are important to Democrats (and in some cases, Republicans). There are also a lot of unknowns that need to be figured out these next several months. The election results could easily influence just how much both sides are willing to deal ahead of next year, when it's likely that Republicans will control at least the House (and quite possibly the Senate, too). Plus, now that the Democrats look as though they're pursuing a super slimmed-down version of a budget reconciliation measure, it looks like there's more of a chance for some kind of China competition bill — though there seems like less of a chance for that measure to be a vehicle for tax provisions. What else? Another big question ahead of the fall: Just how much will Republicans want in a post-election tax deal? There are three provisions that the GOP put in its 2017 tax law to tamp down the price that Republicans are now looking to roll back — a requirement that business write off their research expenses over at least five years, instead of immediately; new limits on the deduction for business interest; and restrictions on companies' ability to quickly write off a wider range of investments. But that also gets you into the potential quandary for Democrats coming up. Republicans will have lots of incentive to clean up some issues from the Tax Cuts and Jobs Act. Still, there are also plenty of Democrats who are big fans of allowing companies to quickly write off their expenses, and some of them have been looking for any avenue they can find to eliminate the new restrictions on deducting research costs. But that's not going to be an issue that unites all Democrats — some won't be huge fans of it to begin with, and others who might be sympathetic to quicker expensing have already said they don't like the idea of passing something like that after falling short on extending the monthly child allowances that they enacted last year.
| | | | HAVE QUESTIONS ABOUT THE MIDTERMS? SUBMIT THEM AND JOIN WOMEN RULE ON 7/21: Now that the Supreme Court has overturned Roe v. Wade , abortion policy is in the hands of the states and, ultimately, voters. Join POLITICO national political correspondent Elena Schneider for a Women Rule "ask me anything" conversation featuring a panel of reporters from our politics and health care teams who will answer your questions about how the court's decision could play out in different states, its impact on the midterms and what it means for reproductive rights in the U.S. going forward. SUBMIT YOUR QUESTIONS AND REGISTER HERE. | | | | | 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. A final point: In a Friday interview, Manchin particularly singled out the international tax changes that Democrats were seeking as something he wasn't comfortable with, as Pro Tax's Brian Faler noted. Treasury Secretary Janet Yellen said over the weekend that the administration wasn't giving up on those proposals — which include increasing the rate on the United States' existing minimum tax on the foreign income of multinational corporations, the levy on global intangible low-tax income, and applying GILTI on a country-by-country basis. "We will continue to look for every possible opportunity that we have to move this forward," Yellen said at a G-20 meeting in Bali, Indonesia, via Reuters. That's with good reason — those GILTI updates would move the U.S. toward complying with the global minimum tax portion of the global tax deal in which the Biden administration and Yellen were very important players. But if Democrats aren't going to be making any GILTI changes via budget reconciliation, it's very hard to predict when the U.S. might make any updates. Republicans have a range of concerns about those proposals, and have noted that Democrats were pushing to make them while the EU, among others, were having difficulties complying with the global minimum tax.
| | | | A message from the National Association of Manufacturers:   | | | | | | GOING TO KEEP THAT GOING: New Zealand will extend a fuel tax cut into 2023 because of persistent inflation and prices that haven't particularly receded since Russia's invasion of Ukraine, CNBC reports. The government first cut the excise tax on fuel by 25 cents per gallon back in March, while also offering relief on road user charges and public transportation fares. Those cuts were eventually extended through mid-August, and Finance Minister Grant Robertson said Sunday that they'll stay in place until at least January. Extending the gas tax cut will cost around $589 million for the government, or around $363 million in U.S. dollars. More from around the world: Those protests in Hungary about new tax hikes on businesses keep going strong, as AFP reports. And starting in September, Reuters notes, Indonesia will bring back export taxes on palm oil — of which it is the world's largest exporter, in fact.
| | | THAT MIGHT BE BAD TIMING: Mayor Lori Lightfoot of Chicago pushed a couple years back to tie property tax increases to inflation, arguing that her predecessors had failed to make the difficult decisions needed to firm up the city's finances. But Lightfoot lobbied for that change, which is about to go into effect, before the big inflation increases of the last year or so. And now, as The Chicago Tribune reports, the big question is whether the city will go through with themin its next budget. If so, property taxes will go up by some $85 million in 2023, or close to four times as much as the previous year. As it stands, property tax increases from inflation are capped at 5 percent. Lightfoot is also up for reelection next year, and her administration will start holding public forums about its 2023 budget this week.
| | | BBC: "Cutting UK taxes now would be a mistake, says IMF." San Francisco Chronicle: "California's public health tax ballot initiative is dead for the year." Bloomberg: "Roger Stone, Wife Agree to $2 Million Settlement in Tax Case."
| | | | DON'T MISS 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. | | | | | | | | Israel's entry for the 1982 Eurovision contest was a song called "Hora," sung by Avi Toledano.
| | | | A message from the National Association of Manufacturers: The National Association of Manufacturers has led the charge against higher taxes on manufacturers. Undoing the progress achieved through tax reform—after which manufacturers kept their promises to raise wages and benefits, hire new workers and invest in their communities—would cost 1 million jobs in the first two years, according to NAM research. With Congress now considering proposals to raise taxes on manufacturers, the NAM is sending a clear message that higher taxes will do nothing to promote competitiveness or address rising costs and workforce shortages. Learn more at https://nam.org/taxaction. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
Comments
Post a Comment