Tax filing: What's changed around the country?
The beginning of the year is seeing several big changes in tax policy around the country.
Some Oregon Democrats propose an alternative state corporate tax hike. They want to raise an additional $1 billion from business over the next two-year budget cycle to fund public education and cut personal income taxes. Their bill would replace the state’s corporate income tax with a commercial activity tax of 0.39 percent on a business’s annual sales above $1 million. Will their effort derail another tax increase up for consideration, a $5.2 billion plan to hike the corporate tax rate? They hope so.
Another California town considers a soda tax, through bubbles of criticism. The city of Davis could follow Berkeley’s 2014 success and pass a 1-cent-per-ounce soda tax. Mayor Pro-Tem Robb Davis has called on the city council to put the initiative on the June ballot. They have about two weeks to decide. Soft drink and distribution companies are, predictably, trying to kill the effort.
Tax filing season is in full swing, but Maine’s lawmakers are still considering tax break extensions. The federal government has extended a $250 tax deduction for school-related expenses paid by K-12 educators as well as a higher maximum deduction for depreciable assets held by small businesses. Maine’s lawmakers have yet to decide whether to include these breaks in the Maine tax code on a temporary or permanent basis. Republicans want the certainty of permanent breaks, while Democrats wonder if the money might be spent on other pressing needs. Sound familiar?
Will Cleveland cancel out Governor John Kasich’s state tax cuts? Cleveland Mayor Frank Jackson proposes to increase the city’s income tax from 2 percent to 2.5 percent. He claims the city lost $111 million since 2011 due to cuts in state funding for local governments, and reductions in taxes on estates, tangible personal property, and commercial activity.
In Virginia, a state senator wants to raise taxes to fund transportation. Senator Frank Wagner proposes ditching the states’ current 2.1 percent wholesale gas tax. Instead, he’d create a per-gallon tax on gasoline retailers that would rise or fall with the wholesale price. The tax would rise as prices fall, and dip when gas prices rise. Wagner estimates the tax could generate annual revenues between $42.1 million and $118 million.
Will the UK’s Google Tax solve base erosion? Not according to TPC’s Howard Gleckman, who writes that ad hoc solutions to the challenges of taxing the intellectual property of multinationals will never work. They do, however, generate lots of heat from some US officials who complain that other countries are soaking US-based multinationals, and others who complain these firms are making millions by gaming the system.
Too big to try? There’s been some talk but little action on comprehensive tax reform, explains The New York Times, and prospects will remain dim no matter who moves into the White House in 2017. Darkening the lights further: In 2016, Senate Majority Leader Mitch McConnell may slow-walk a variety of legislative measures that have bipartisan support but are divisive among Republicans—including international tax reform. He’s no fan of House GOP efforts to push international reform this year.
This article first appeared at TaxVox.
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