The Affordable Care Act survives another US Supreme Court challenge. The High Court ruled yesterday that Congress did not invalidate the 2010 health insurance law when it repealed the penalty/ tax on those without insurance. The Court said Republican-led states that sued did not have legal standing to bring the challenge.
Today’s infrastructure roundup. Senate progressives say they might accept a narrow bipartisan bill on traditional infrastructure only it is paired with an even bigger bill to support families. The total package they want would cost about $6 trillion. Their vision is to pass it with only Democratic votes but it is unlikely all Senate Democrats would support a bill this big. Meanwhile, the bipartisan group of now-21 senators still has not agreed on how to pay for their roughly $1 trillion infrastructure plan.
Another “no” on a federal gas tax increase. Speaker Nancy Pelosi said “no” to a gasoline tax expansion to offset costs of an infrastructure plan. The White House also is skeptical. The bipartisan Senate group is considering a federal tax on electric vehicles to help pay for new roads. The problem: It would violate Biden’s pledge to not raise taxes on households making less than $400,000.
Treasury Secretary Janet Yellen passes on the SALT question. In testimony before the House Ways & Means Committee, Yellen did little to clarify Biden’s view on the federal $10,000 cap on state and local tax (SALT)deduction. She said the president recognizes concerns of some states and wants to work with Congress to mitigate negative impacts. But the President’s budget is silent on repeal or reform.
Biden’s proposed corporate tax hike may depend on voter perception of who pays for it. TPC’s Howard Gleckman unpacks the incidence of the corporate tax. TPC’s analysis suggests that on average, middle-income households would get a tax cut under the American Jobs Plan and the American Families Plan. But after-tax incomes would fall for many households when including their share of Biden’s increases in corporate taxes. Will voters in those households think they will pay that corporate tax increase.?
Does North Carolina need more tax cuts? Maybe, say some lawmakers, given a projected $6.5 billion surplus over the next two years. General Assembly Republicans reached an agreement to spend $25.7 billion in the new fiscal year that begins July 1 and $26.7 billion next year. But the state’s revised economic forecast, released after the budget agreement, projects $29.7 billion in revenue next year and $30.7 billion the year after that—and that doesn’t include federal aid available through the American Rescue Plan. Happy days are here again?
And no tax hikes in Connecticut. With its $46.4 billion, two-year budget, the state has a record rainy day fund and no plans for major tax increases. Things could change once Pandemic-related federal aid and the federal bump in unemployment benefits expire. Tax revenues could plunge unless the state gets far more people back to work, or raises taxes on those with higher incomes.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at email@example.com.