Senate Democrats will push to repeal a Treasury Department and IRS rule, which goes into effect Aug. 11, that they say would “block critical state workarounds” to the $10,000 limitation on state and local tax deductions.
The $10,000 deduction limit was a key feature of the 2017 tax code overhaul, and has been the subject of hearings in the House Ways and Means Committee where Democratic members are urging a repeal of that provision.
The House Ways and Means Committee on Thursday released documents relating to a Dec. 13, 1973, request by the Joint Committee on Taxation for President Richard Nixon’s tax returns that show five years of returns were provided the same day by the IRS.
Committee Democrats said the significance of the documents is that Nixon’s tax returns and other private tax information were handed over to what was then called the Joint Committee on Internal Revenue Taxation because of authority under Section 6103 of the tax code.
Congress is racing to complete work on some big-ticket items before adjourning for the August recess. CQ Roll Call’s budget and appropriations reporter Kellie Mejdrich reports on a deal to extend the debt limit and set spending levels for two years. And finance reporter Doug Sword explains why the House plans to vote on a bill to shore up struggling pension plans. Meanwhile, the Senate plans to give final approval of a permanent compensation fund for victims of the Sept. 11 terrorist attacks.
Show notes:
The Senate ratified three tax treaties with Japan, Luxembourg and Switzerland on Wednesday, joining a fourth pact with Spain that won approval a day earlier.
The votes were lopsided as no more than three senators opposed each of the deals, which update rules aimed at reducing taxes on multinational companies operating in both the U.S. and treaty partner nations.
House Democrats will bring a $64.4 billion measure that would provide financial lifelines to union pension plans to the floor next week.
House Majority Leader Steny H. Hoyer and House Ways and Means Chairman Richard E. Neal, the bill’s author, on Tuesday confirmed the schedule for the legislation, which has gone through the Ways and Means as well as Education and Labor panels.
Senate Finance Chairman Charles E. Grassley sees a “little bit of progress” on the tax extenders front in House Democrats’ decision to push repeal of the “Cadillac tax” on high-cost health insurance plans, without offsets for the lost revenue.
The House’s pay-as-you-go rules have been a hindrance for much of the year on moving legislation to extend tax breaks that expired at the end of 2017 and 2018. The most expensive of those is a provision originally authored by Grassley in 2004 to provide a $1 per gallon biodiesel blenders tax credit, which costs about $3 billion a year.
For more than a decade, oil refiners didn’t realize what a moneymaker they had in butane — at least for tax purposes.
They do now.
With new warnings that the U.S. could run out of money to meet its obligations, Congress and the Trump administration are racing to raise the debt limit before lawmakers head home for August, says CQ Roll Call’s appropriations reporter Jennifer Shutt. And tax reporter Doug Sword explains how oil refiners could get up to a $10 billion windfall with an expired tax credit unless Congress intervenes.
There’s no lack of plans from Democrats paid for by undoing at least part of the huge 2017 corporate tax rate cut. But the only Democrat with a tax bill currently moving through Congress is pointedly not talking about revisiting the lower 21 percent rate.
The 14 percentage point rate cut in the 2017 law, which is permanent, was projected to save corporations $1.35 trillion over its first 10 years.
Legislation that would beef up the refundable portions of the Earned Income Tax Credit and Child Tax Credit for 2018 and 2019 also includes a repeal of the so-called ″church parking tax,″ that left some nonprofits paying taxes on transportation-related fringe benefits for their employees as part of a change made by the 2017 tax overhaul. Those and other changes in the bill would cost a total of $102.5 billion over a decade, according to the Joint Committee on Taxation, with no offsetting revenue increases or spending cuts.
The panel will take up four separate pieces of legislation Thursday, including the tax extenders measure, which also would provide tax benefits for victims of natural disasters that occurred in 2018 and this year. Two other bills on tap would extend some retroactive tax benefits to same-sex married couples and add $1 billion in each of the next two fiscal years for child care funding under the Temporary Assistance for Needy Families program.
One bright spot in an otherwise dreary outlook for U.S. soybean farmers, caught in the ongoing China trade war crossfire, has been the 1.5 gallons of biodiesel — a cleaner-burning alternative to traditional diesel motor fuel — that each bushel of soybeans yields.
Protected on one side by the EPA’s renewable fuels mandate and by steep import tariffs on the other, some biodiesel producers were able to post profits last year despite the lapse of the industry’s coveted $1 per gallon tax credit for the sale or use of the fuel.
A handful of Republican senators are holding up what could be the biggest retirement savings bill in more than a decade.
After sailing through the House on a 417-3 vote May 23 before the weeklong Memorial Day recess, supporters hoped the legislation would garner unanimous consent for quick passage in the Senate the following day. But senatorial holds accumulated and continue to stall the measure.
Senate Finance ranking member Ron Wyden threatened to hold up Treasury Department nominees after receiving an “unresponsive and wholly unacceptable” response to questions he posed about the department’s refusal to release President Donald Trump’s tax returns.
“If the Treasury Department refuses to answer our questions, I am prepared to again place a hold on department nominees as I did previously when routine requests for information went unanswered,” the Oregon Democrat said in a statement Thursday.
The House on Thursday will take up what could be the most significant changes in retirement savings policy in more than a decade.
But the bill’s backers acknowledge it’s just an initial step in addressing what critics call a huge hole in Americans’ nest eggs, at a time when traditional pension plans are increasingly rare and Social Security is facing financial headwinds.
Both chambers are moving to reverse tax law changes that unintentionally subjected investment earnings of low-income children to the same tax rates paid by wealthier households.
The House, which under the Constitution must originate revenue bills, plans to act later this week on a broader retirement savings bill that would eliminate the full set of changes to the so-called kiddie tax made by Republicans in the 2017 tax overhaul.
Senate Finance Chairman Charles E. Grassley announced the creation of five task forces charged with delving into what to do about 42 myriad tax breaks that continually get turned on and off by Congress, ranging from an incentive to sell cleaner-burning biodiesel fuel for trucks to a deduction for mortgage insurance premiums.
The joint announcement by the Iowa Republican and Oregon Democrat Ron Wyden, the committee’s ranking member, comes 16 and a half months after 26 tax “extenders” expired at the end of 2017. Grassley said the task force is charged with coming up with solutions by the end of June, including whether to consolidate or change certain provisions, make them permanent or allow them to lapse.
Treasury Secretary Steven Mnuchin said Wednesday he expects the courts will resolve the conflict between the administration and House Ways and Means Chairman Richard E. Neal over the release of President Donald Trump’s tax returns.
“This will go to the third branch of government to be resolved,” Mnuchin said Wednesday during questioning before the Senate Financial Services Appropriations Subcommittee.
House Ways and Means Chairman Richard E. Neal issued subpoenas Friday for Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig to provide President Donald Trump’s tax returns.
The action takes to the next level a five-week-long dispute between the administration and Neal, D-Mass., who first asked on April 3 for six years of Trump’s personal tax returns, the returns for eight Trump companies and other tax information.
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