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Yellen Passes Deal-Making Test on Taxes, With Long Road Ahead – Saleha Mohsin, Bloomberg ($). “Janet Yellen proved her bona fides as a political deal-maker by leading the world’s richest economies to an agreement on global taxes that had eluded negotiators for nearly a decade. Yet what was hailed as a victory at the Group of Seven for President Joe Biden’s Treasury secretary may not carry far in Washington, where winning lawmakers’ support for the administration’s vast plans for tax and spending increases will be a far tougher challenge."
The G-7 finance ministers on Saturday sealed a landmark deal in London, paving the way to help countries collect more taxes from big companies and setting a minimum global corporate tax rate of at least 15%.
The G-7 deal could 'adversely' impact and 'ultimately harm' American workers and businesses, Senator Mike Crapo and Representative Kevin Brady said in a statement released Saturday. They are the senior Republicans on the congressional tax-writing committees.
A G-7 Deal on a Global Minimum Tax for Companies Faces Hurdles – Richard Rubin, Paul Hannon and Sam Schechner, Wall Street Journal ($). “An agreement by wealthy countries to impose minimum taxes on multinational companies faces a rocky path to implementation, with many governments likely to wait and see what others, especially a divided U.S. Congress, will do.”
In countries with parliamentary systems, governments can quickly deliver on pledges, turning them into local laws and regulations. In the U.S., however, a slim Democratic majority in the House, an evenly split Senate, antitax Republicans and procedural hurdles complicate passage.
Other countries may be reluctant to change their laws or remove taxes that hit U.S.-based tech companies without seeing Congress move first. U.S. lawmakers may take the reverse view, wary of raising taxes or ceding tax authority to other nations without assurances of a complete global accord. If the U.S. raises taxes and others don’t, disadvantages could arise from having a U.S. corporate headquarters.
Democratic tax chiefs “look forward to reviewing the details.” Is that a ringing endorsement?
NEAL, WYDEN STATEMENT ON G7 FINANCE MINISTERS’ GLOBAL MINIMUM TAX AGREEMENT – House Ways and Means Committee. “Ways & Means Committee Chairman Richard E. Neal (D-MA) and Senate Finance Committee Chair Ron Wyden (D-OR) released the following statement after finance ministers from the G7 countries announced that they agreed to a minimum global corporate tax rate of at least 15 percent and reaffirmed the commitment to the removal of all Digital Services Taxes.”
‘This historic consensus by the G7 paves the way for formal agreements to be reached among the participants in the Inclusive Framework negotiations on this matter. We look forward to reviewing the details of today’s deal and applaud the Biden Administration’s leadership in working to level the international playing field and support American workers.’
Progressives Fret Over Biden’s Wooing of GOP Over Infrastructure – Jarrell Dillard, Bloomberg ($). “Some Democratic lawmakers are growing impatient with President Joe Biden’s attempts to strike a deal with Republicans on infrastructure and the party’s progressives are increasingly wary that he’ll give away too much.”
‘The bottom line is that progressives believe that the pursuit of Republican votes cannot come at the expense of limiting the scope of popular, necessary, and urgent investments,’ said Chris Evans, spokesperson for Representative Pramila Jayapal, head of the Congressional Progressive Caucus.
Brady Urges Biden, Capito to ‘Stay at the Table’ on Jobs Plan – Doug Sword, Tax Notes ($). “The top House Republican taxwriter is holding out hope for bipartisan talks on President Biden’s American Jobs Plan even as GOP criticisms linked a disappointing jobs report to Democrats’ array of spending proposals.”
Biden faces challenge with Democrats on infrastructure package – Naomi Jagoda, The Hill. “President Biden faces hurdles toward getting consensus among Democrats on an infrastructure package, regardless of if it's bipartisan legislation or if Democrats pursue legislation on their own.”
[S]ome Democrats have raised concerns about aspects of the tax proposals Biden has floated to pay for infrastructure legislation, so reaching a deal won’t necessarily be smooth sailing even if the president isn't focused on attracting Republican support.
Tax Foundation: Biden Jobs Plan Shrinks Economy in Long Run – Doug Sword, Tax Notes ($). “President Biden’s American Jobs Plan would spend $2.2 trillion over the next 10 years but cut economic growth in the long run by 0.5 percent, according to the Tax Foundation.”
Road User Fees Possible in Five Years, Key Democrat Says – Lillianna Byington, Bloomberg ($). “With electric vehicles expected to become more common over the next few years, top House transportation Democrat Peter DeFazio said he hopes the U.S. will begin charging a tax on vehicle miles traveled by the time Congress reauthorizes a new highway bill in five years.”
Biden Plan Gives IRS More Leeway to Impose Tax Penalties – Jeffery Leon, Bloomberg ($). “The changes, included in the latest “Greenbook,” would allow the IRS to approve penalties for tax violations at any time before assessment for cases not subject to Tax Court review and would eliminate the requirement for written approval of accuracy-related and fraud penalties.”
Job Market Paradox: States Got a Record Rescue But Aren’t Hiring – Amanda Albright and Nic Querolo, Bloomberg ($). “In making the case for its $350 billion lifeline to U.S. states and cities, President Joe Biden’s administration emphasized a key figure: Over one million government jobs were lost during the pandemic -- and the money would help bring them back.”
On Friday, the jobs report showed there’s still a long way to go to reach that goal. While state and local governments added about 78,000 jobs to their payrolls in May, it was driven exclusively by schools, which have been bringing workers back as they reopen for in-person learning.
Outside of education, they actually cut employment, leaving overall payrolls about 1.19 million jobs slimmer than they were before the pandemic hit. That’s more than were lost in the years that followed the Great Recession.
Airbnb, VRBO to be Subject to Lodging Taxes Under New Nevada Law – Brenna Goth, Bloomberg ($). “Nevada will collect lodging taxes from short-term rental companies such as Airbnb Inc. under a mearsure signed into law by Gov. Steve Sisolak (D). The law (A.B. 363) will requires local governments to collect the taxes in counties with 700,000 or more residents and cities of 25,000 or more people in those counties.”
Hedge Funds, Tech Spur Texas Wealth Boom as California Fades – Brendan Case, Bloomberg ($). “Big Tech is flocking to Austin. Big Finance is expanding in Dallas. Houston, the epicenter of the U.S. energy industry, is diversifying away from Big Oil. Florida may be the destination of choice for A-list money managers looking to flee Wall Street. But in the post-pandemic economy, Texas is rising, welcoming a rush of talented, wealthy people from California, New York and Illinois with the lure of lower taxes, luxury suburbs and opportunities to invest their cash -- even as state lawmakers cast a wary eye at their potential blue-state politics.”
Remote Sellers Eye Tax Amnesty in Pennsylvania and Florida – Michael Bologna and Tripp Baltz, Bloomberg ($). “The world of e-commerce selling is still adapting to the U.S. Supreme Court’s groundbreaking 2018 ruling in South Dakota v. Wayfair , which permitted states to impose tax collection duties on remote retailers based on economic activity rather than physical presence. This week remote sellers—those without a physical presence in a state but selling products for delivery into that state—kept their eyes on limited amnesty programs in Pennsylvania and Florida.”
Montana Governor Signs Law Providing for Infrastructure Through Property Tax Increment Financing – Bloomberg ($). “The Montana Governor May 20 signed a law providing for infrastructure through property tax increment financing. The law includes measures: 1) revising targeted economic development district laws; 2) providing the tax increment may not include certain state equalization mills for elementary and high school education; 3) limiting the duration of a future tax increment provision; and 4) amending relevant definitions. The law took effect May 20. [S.B. 388, enacted 05/20/21]”
Interest Grows in Combining Voter Registration With Tax Filing – Vanessa Williamson, Tax Policy Center. “Working with nonprofit organizations participating in the IRS’s Volunteer Income Tax Assistance (VITA) program, I conducted field experiments to estimate the impact of offering voter registration at tax filing. I found it doubled the likelihood of an unregistered person registering to vote. Based on these findings, if voter registration were offered at all VITA programs nationwide, it would register more than a hundred thousand people a year.”
It’s National Chocolate Ice Cream Day! Wondering how to celebrate it? Luckily, guidance is provided:
While you can enjoy this day with a scoop or two, you could also explore the variety of chocolate ice creams available, too. 'How many kinds of chocolate ice cream can there be?' you might ask. Well, you might be surprised. For starters, of course, there’s dark chocolate and milk chocolate. But then we can add peanut butter or marshmallow. We just recently celebrated Rocky Road. And don’t forget all the kinds of fudge. Some people like chocolate and mint mixed together, too. And the list goes on and on.