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September 2, 2014

Posts in "Taxes"

August 5, 2014

Durbin, Reed, Warren Seek Executive Action to Combat ‘Inversion’

banking004 070814 1 445x295 Durbin, Reed, Warren Seek Executive Action to Combat Inversion

Warren is among Democrats urging the president to take executive action on corporate inversions. (Tom Williams/CQ Roll Call File Photo)

A trio of liberal Senate Democrats want President Barack Obama to make use of his “pen and phone” to cut down on corporate “inversions.”

In a new letter, Sens. Richard J. Durbin of Illinois, Jack Reed of Rhode Island and Elizabeth Warren of Massachusetts seek executive action to reduce or eliminate tax preferences that come along with the business practice, in which a U.S. company will acquire an overseas company and then be based in the foreign country, at least on paper. The practice has increased in popularity as a tax-avoidance strategy.

Full story

By Niels Lesniewski Posted at 12:42 p.m.
Democrats, Taxes

July 23, 2014

Internet Sales Tax Bill Dealt a Blow; Wyden Cheers

wyden 009 040114 445x308 Internet Sales Tax Bill Dealt a Blow; Wyden Cheers

(Bill Clark/CQ Roll Call)

Majority Leader Harry Reid is quietly stepping back from his intention to bundle an Internet tax moratorium with a more contentious proposal to allow states to collect online sales taxes, at least for now.

The Nevada Democrat had said July 16, “I think it’s fair to say the two are going to be together.” The move, backed by Senate Majority Whip Richard J. Durbin, D-Ill., would have constituted a run around Finance Chairman Ron Wyden, D-Ore., who opposes the legislation known as the Marketplace Fairness Act.

But, CQ Roll Call’s Alan K. Ota reported that as of Tuesday, the plan had changed:

Full story

By Niels Lesniewski Posted at 12:27 p.m.
Ron Wyden, Taxes

July 16, 2014

Democratic Leaders Plan to Bypass Wyden on Internet Sales Tax Combo Bill (Video)

durbin 114 021114 445x302 Democratic Leaders Plan to Bypass Wyden on Internet Sales Tax Combo Bill (Video)

Durbin wants states to be able to collect sales taxes on online transactions for out-of-state purchases. (Bill Clark/CQ Roll Call File Photo)

Senate Democratic leaders plan to do an end run around Senate Finance Chairman Ron Wyden and combine House-passed legislation extending a moratorium on taxing Internet access with a Senate-passed proposal to require online retailers to collect sales tax.

“I think it’s fair to say the two are going to be together,” Senate Majority Leader Harry Reid, D-Nev., told reporters Wednesday.

The Internet Tax Fairness Act passed the House Tuesday by a voice vote. The Marketplace Fairness Act passed the Senate last year, shepherded by Majority Whip Richard J. Durbin, D-Ill., and Sen. Michael B. Enzi, R-Wyo.

“There is a deadline, Nov. 1,” Durbin said. “The Internet Tax Freedom Act would expire. States and localities would be able to tax the Internet, which is something none of us want to see; I shouldn’t say none of us, most of us don’t want to see that happen.

“So now we have suggested to the sponsors and supporters of that measure that if they join it with Marketplace Fairness that we have might have a great package to get done on time,” Durbin continued. Full story

June 26, 2014

Bipartisan Patch Job for Highway Bill Coming Together

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The bipartisan deal nixed Wyden’s proposal that would increase taxes. (Tom Williams/CQ Roll Call File Photo)

A big fight over how to best avert a crisis in highway construction projects won’t happen before the July Fourth recess, and there might be a deal to avoid the fight altogether.

Senate Finance leaders decided to pause a markup of a package to avert a shortfall in federal highway funding amid optimism there will be a deal before a deadline later in July.

The leadership of the committee rolled out a $7.6 billion bipartisan package that nixes a piece of an earlier proposal from Finance Chairman Ron Wyden, D-Ore., that would increase taxes on heavy vehicles and makes other tweaks suggested by Republicans, with further changes possible as negotiators work to craft a final agreement with both sides of the Rotunda.

Full story

June 24, 2014

Ahead of Recess, Highway Bill Standoff Gets Political (Video)

tax event010 041014 445x296 Ahead of Recess, Highway Bill Standoff Gets Political (Video)

Norquist’s Americans for Tax Reform says a Democratic highway bill violates the group’s anti-tax pledge. (Tom Williams/CQ Roll Call File Photo)

When the Senate returns from the July Fourth recess, lawmakers will have just about two weeks to fix a shortfall in funds for federally-backed highway projects, with both parties again in a dispute over taxes.

If past is prologue, that means campaign-style events with bulldozers and hard hats will be coming to a city near you, and there still might not be a good solution. The chairman of the Senate Finance Committee has floated plan to keep highway projects from grinding to a halt — but that solution has already drawn the ire of Republicans.

Still, Sen. Ron Wyden, D-Ore., says talks will continue, and he remains open to GOP suggestions, which would clearly include spending cuts.

Full story

June 18, 2014

Murphy, Corker Call for 12-Cent Gas Tax Boost for Highway Bill

corker 049 0601014 445x314 Murphy, Corker Call for 12 Cent Gas Tax Boost for Highway Bill

(Bill Clark/CQ Roll Call)

Updated 2:37 p.m. | Sens. Christopher S. Murphy, D-Conn., and Bob Corker, R-Tenn., are proposing a 12-cent increase in the gas tax to pay for a renewal of highway and transit programs, which could run out of funding by the end of the month.

“Reaction on the Democratic side has been positive,” said Murphy, who noted he spoke with Senate Majority Leader Harry Reid, D-Nev., and Senate Finance Chairman Ron Wyden, D-Ore., about the plan.

“I think on our side of the aisle we recognize that it’s time to stop talking theoretically and start talking really in practical terms,” Murphy said, adding that bipartisan support is key to getting the plan through the chamber.

But it’s unclear if a substantial number of the Republican Conference will embrace the idea.

“We will see,” Corker said when asked how his GOP colleagues would react.

One big GOP selling point was that the tax increase would not violate the Americans for Tax Reform pledge if it is paired with a provision making some popular tax breaks that are typically part of the tax extenders package permanent.

According to Corker, the list of tax breaks includes: the research and development tax credit; Section 179 expensing, a tax break encouraging small businesses to by business equipment; the deduction of state and local sale taxes; the deduction of up to $250 in classroom expenses that teachers paid for out of their own pocket; a subsidy for mass transit and benefits given for land donated for conservation purposes.

“If you just took those, we do them each year, but you make them permanent; I don’t think there is anybody that disputes making those permanent, by the way, that alone would generate $189 billion in savings over the next 10 years,” Corker said. “So if the Finance Committee chose to link this … with that … you would not be violating the pledge.”

The 12-cent increase would raise $164 billion over 10 years, Corker said.

Using the tax break extension to offset a gas tax increase would, however, take away the ability to use those same tax breaks to buy down tax rates as part of a future tax reform package.

The White House has threatened to veto permanent tax cut extensions, but it’s not clear if they would oppose them if paired with a gas tax hike.

The White House has not backed a gas tax hike previously and has instead proposed using short term revenue from corporate tax reform to pay for the highway bill.

The two senators hope to build support for the plan over the summer, particularly with the Finance Committee, which will draft the funding plan for the highway bill, and the Environment and Public Works Committee, which oversees transportation policy.

“We haven’t introduced it as formal legislation yet because we acknowledge that ultimately this is going to be passed as part of a package coming out of the Finance Committee and EPW Committee,” Murphy said.

They don’t expect any action until after the elections. In the meantime, they believe Congress will pass a short-term patch to keep transportation programs funded through the end of the year.

“The same thing will happen this summer that’s happened the last [few] times,” Corker said. “That is, that some gimmick will be created to make it look like its being paid for when its actually not.”

Along with raising the federal gasoline and diesel taxes by six cents in each of the next two years for a total of 12 cents, the plan would also index the gas tax to inflation, using the Consumer Price Index to ensure that it remains viable into the future.

The plan would raise enough to provide enough funding to offset current MAP-21 spending levels over the next 10 years and replace all of the buying power the federal gas tax has lost since it was last raised in 1993.

“This modest increase will pay dividends in the long run and I encourage my colleagues to get behind this bipartisan proposal,” Murphy said.

Both Murphy and Corker said they didn’t support a possible House plan to use reforming the postal service to fund the highway bill.

“I think it’s a gimmick,” Murphy said. “The point of our proposal is to try to solve this problem for the long-term.”
“Only in Washington would you take money from one insolvent enterprise to fund another insolvent enterprise,” Corker said.

The senators’ bipartisan proposal was criticized by the conservative Club for Growth.

“This is a $164 billion dollar tax increase, plain and simple. A gas tax hike would be both bad policy and terribly anti-growth,” said Club for Growth President Chris Chocola. “It’s not an example of political courage to avoid reforming a broken system. Instead of standing up to the special interests who feast on the chronically bankrupt Highway Trust Fund year after year, Senator Corker and Senator Murphy have essentially decided that throwing more money into a black hole is a good path forward. It’s not. Rather than perpetuate this failed system, Congress should devolve highway funding to the states and let them fund their own infrastructure needs.”

Steven T. Dennis contributed to this report.

By Humberto Sanchez Posted at 2:11 p.m.

June 9, 2014

Senate Democrats Have Full Agenda Ahead

reid101213 436x335 Senate Democrats Have Full Agenda Ahead

(Bill Clark/CQ Roll Call File Photo)

Senate Democrats are in a race against the clock in order to consider all the must-pass legislation, such as a new highway bill and an overhaul of the Department of Veterans Affairs, alongside a host of election-year items aimed at drawing contrasts with the GOP.

The Senate is poised to consider a bipartisan deal — drafted by Sen. Bernard Sanders, I-Vt., and Sen. John McCain, R-Ariz. — that would reduce wait times for medical care at the VA.

“Details of the agreement are not in writing yet … they are being drafted,” Senate Majority Leader Harry Reid said Monday. Reid said he “will be happy to schedule a vote as soon as possible.”

The bill has bipartisan urgency and momentum behind it to deal with the still-widening VA scandal.

But Democrats will also consider a host of other bills aimed squarely at defining the GOP as the party of the rich and Democrats as the party of the people ahead of November. Full story

May 20, 2014

Reid: No Obamacare Amendments on Tax Cut Bill (Video)

Senate Majority Leader Harry Reid has no interest in debating a repeal of the medical device excise tax as part of any negotiations to revive a stalled tax cut bill.

“That’s an Obamacare amendment. We’re not going to do that. [Republicans] can have as many amendments as practical to change the bill that’s on the floor, and there’s plenty of amendments that need to be offered on that. We have a lot on our side,” the Nevada Democrat said. “So, the answer is ‘no’.”

Full story

May 17, 2014

Unemployment Extension Amendment Offered on Tax Cut Bill

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Reed hopes to add a one-year extension to the Senate’s $85 billion tax cut bill. (Bill Clark/CQ Roll Call File Photo)

Sen. Jack Reed wants to add a one-year unemployment extension to the Senate’s $85 billion tax cut bill, but his amendment is a long-shot to pass the Senate, let alone become law.

The Rhode Island Democrat’s proposal would be retroactive to December — so people who have gone without checks for months would be eligible for a sizable lump sum.

“I am committed to helping job seekers,” he said in a statement. Full story

May 15, 2014

Senate Tax Cut Vote: Republicans Filibuster $85B Bill

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Senate Republicans filibustered a tax cut package Thursday, causing procedural gridlock. (CQ Roll Call File Photo)

Senate Republicans filibustered an $85 billion tax cut package after Democrats refused to allow votes on their amendments.

Cloture on the tax cut measure failed 53 to 40. It needed 60 votes to advance. Illinois Senator Mark Kirk was the only Republican to vote yes.

The grab bag of more than 50 tax breaks, which expired at the end of 2013, includes breaks for research and development, mortgage forgiveness and the deductibility of state and local sales taxes.

Republicans have increasingly complained that Senate Majority Leader Harry Reid, D-Nev., has been using his authority in a dictatorial way. Full story

By Humberto Sanchez Posted at 3:47 p.m.

May 13, 2014

Medical Device Tax Repeal Vote Sought by GOP (Video)

hatch012714 438x335 Medical Device Tax Repeal Vote Sought by GOP (Video)

(Bill Clark/CQ Roll Call File Photo)

Republicans are eager to attach a repeal of a medical device surtax to the tax cut extension package on the Senate floor, but the chamber’s top Democrat seems to have no appetite for it.

The disagreement only increases the likelihood that the broader $85 billion tax extenders bill will join a long list of measures having trouble getting off the Senate floor. The larger bill would revive a package of more than 50 tax breaks that have expired.

“For some reason they don’t want to have that vote,” said Finance ranking member Orrin G. Hatch, R-Utah, referring to the Democratic position on rolling back the 2.3 percent medical device tax. “A lot of companies are leaving America to go overseas.” Full story

May 12, 2014

For Tax Cut Bill, Senators Face Vote on Boosting Deficit

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Coburn plans to force senators to vote on increasing the deficit before the Senate can pass a tax cut bill. Others are considering attaching an unemployment extension. (Bill Clark/CQ Roll Call File Photo)

Senators will likely face a separate vote on boosting the deficit in order to pass an $85 billion tax cut extenders bill, according to key Senate Republicans.

Retiring Sen. Tom Coburn, R-Okla., a staunch opponent of the extenders bill, said he would “raise every order I can” to block the bill and “try to get us to do the right thing” for taxpayers.

He expects someone on the Budget Committee to raise a budget point of order. And, “If they don’t I will,” Coburn said.

Full story

Tax Bill Highlights Split Between Grover Norquist, Club for Growth

tax event010 041014 445x296 Tax Bill Highlights Split Between Grover Norquist, Club for Growth

Norquist (Tom Williams/CQ Roll Call File Photo)

The tax-cut-extension bill set for the Senate floor this week highlights a longstanding fissure between Grover Norquist’s Americans for Tax Reform and the Club for Growth.

The dispute comes down to this: The club would rather see the entire extenders package disappear — and thus see higher revenue flowing to the government, at least in the short-term — because it believes that many of the provisions are anti-growth and would harm the economy in the long run. For Norquist’s ATR, lower revenue is the top priority.

The two groups have faced off in the past — on a repeal of an ethanol tax break that would have violated ATR’s no-tax pledge, and on broader strategy, with the club nearly always opposing major budget legislation that has reached President Barack Obama’s desk, while Norquist has often supported the deals cut by GOP leadership. Full story

April 30, 2014

Tax Extenders Bill Is Big Deal for Nevada, Florida

reid031114 445x298 Tax Extenders Bill Is Big Deal for Nevada, Florida

(Tom Williams/CQ Roll Call File Photo)

Taxpayers from Nevada and Florida can expect to get walloped if Congress doesn’t renew a package of expired tax breaks headed for the Senate floor.

Both states benefit disproportionately from two major expired provisions — the deductibility of state sales taxes and a mortgage forgiveness provision.

Unless Congress acts, homeowners getting relief from their banks in two of the states hit hardest by the housing crash would see a huge tax increase. And because neither  state has an income tax, its taxpayers would be especially hurt if the sales tax deduction isn’t renewed.

“That’s a double whammy for at least those two states,” said Will McBride, chief economist at the Tax Foundation, a nonpartisan research think tank. “A sudden end to those tax breaks, it could be a significant hit.” Full story

April 27, 2014

Beer Taxes, Regs a Bipartisan Issue

UnionPub 002 061912 330x219 Beer Taxes, Regs a Bipartisan Issue

(Chris Maddaloni/CQ Roll Call File Photo)

Fighting beer regulations and taxes has brought members of both parties together.

Lawmakers in both parties have been worried the Food and Drug Administration would impose new regulations restricting the repurposing of grains used in the brewing process that currently get used as animal feed.

Sen. Charles E. Schumer, D-N.Y.,  has been visiting breweries over the two-week recess period to criticize the possibility. He said in a statement Thursday that he had been assured the FDA would not go down that road.

Full story

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