Treasury: Tax gap could grow to $7 trillion over ten years. Treasury estimates that the difference between how much Americans owe in taxes and how much they pay will grow to $7 trillion over the next decade. Deputy Assistant Secretary Mark Mazur says a growing gap results in higher tax rates, and urged lawmakers to support additional IRS funding. Congress cut the IRS budget by 20 percent over the past decade.
Non-tax filer families can soon sign up for the child tax credit through two IRS portals. The portals allow families to update their information with the IRS without having to file a tax return. This will allow them to receive their monthly payments as soon as July 15. Said TPC’s Elaine Maag, “it is great news that the IRS has clarified publicly that there will be an option for non-filers to claim the child tax credit,” since many are beyond the tax system and difficult for the IRS to reach. “Alerting nonprofits and agencies that work in communities early is really going to be critical in getting people signed up.”
Finance panel moves key Biden Treasury nominees. The Senate Finance Committee sent to the floor several Treasury Department nominees including Lily Batchelder as assistant secretary for tax policy, Nellie Liang as domestic finance undersecretary, Ben Harris as assistant secretary for economic policy, and Jonathan Davidson as assistant secretary for legislative affairs. All were easily approved by bipartisan votes.
An infrastructure deal for the Gang of 10? A bipartisan group of 10 senators says they have agreed among themselves on a plan to spend $974 billion over five year or $1.2 trillion over 10. They say it includes $579 billion in new money and is fully paid for, but includes no tax increases. They disclosed no details.
No gas tax hike, top Treasury official says. In an interview with the Tax Policy Center’s webcast The Prescription, assistant secretary for tax analysis Kim Clausing said the Administration opposes using a gas tax increase to pay for new infrastructure spending. Clausing said such a tax hike would violate President Biden’s vow to not raise taxes on those making $400,000 or less. Sen. Mitt Romney, one of a bipartisan group of senators looking for compromise infrastructure plan, floated such an increase this week.
Will Michigan ban city income taxes for those work but don’t live in a city? The state’s House Tax Policy Committee debated legislation to ban city income taxes on commuting non-residents. The measure would cut revenues in 24 municipalities that levy an income tax, including Detroit.
North Carolina’s senate approves a big tax cut. The chamber approved cuts in personal and corporate income taxes and other business taxes by over $2 billion over two years beginning in 2022. The bill would cut the personal income tax rate from 5.25 percent to 4.99 percent and raises the standard deduction from $10,750 for a single filer to $12,750. It also would repeal the 2.5 percent corporate income tax over five years beginning in 2024. The House will soon consider the bill. Gov. Roy Cooper opposes the corporate tax cut.
Next week on the Hill. The Senate Finance Committee will hold a hearing on mental health care on Tuesday. The panel will hold a hearing on President Biden’s fiscal year 2022 budget on Wednesday. On Tuesday, the House Ways & Means Social Security Subcommittee will hold a hearing on equity in Social Security.
On the global horizon: A European carbon border tax? The Wall Street Journal reports (paywall) on the European legislative effort to tax imported goods based on greenhouse gases emitted to make them. Under the EU proposal, European importers would have to buy certificates to cover the carbon content of their imports in certain sectors, starting with steel, aluminum, cement, and fertilizer, as early as 2023.
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