House Passes Speaker McCarthy’s Debt Limit Bill
With House GOP approval, will the debt limit bill prompt negotiations with President Biden? After much last-minute wrangling, the House passed legislation that would cut deficits by capping discretionary spending and undoing big pieces of the Inflation Reduction Act (IRA), in exchange for temporarily raising the debt ceiling. To gain support from remaining House GOP holdouts, the proposal was amended. It now accelerates when certain work requirements tied to federal benefits would go into effect, and it retains IRA incentives related to ethanol and other biofuels, a key change that convinced midwestern representatives to come out in support of the plan. The proposal won’t go anywhere in the Senate, but Rep. Mike Lawler (R-NY) said it will serve as a starting point for negotiations, per Politico.
US Supreme Court hears tax forfeiture case. Yesterday the Court heard arguments in the case of a 94-year-old Minneapolis woman, who claims that Hennepin County unconstitutionally stole her home equity by pocketing all the proceeds from her home’s sale due to unpaid property taxes. Like at least 12 other states, Minnesota allows a county to sell a property seized for lack of tax payment at auction and keep any surplus funds from the sale. The county argues that it does not profit from the sale. This is the first time the Supreme Court will consider whether a property tax forfeiture can be considered a “taking.” A decision is expected by summer.
The Walt Disney Company sues Florida Gov. Ron DeSantis. The lawsuit caps a year of conflict between the company and the governor. Disney leaders raised DeSantis’ ire last year when they criticized the so-called “Don’t Say Gay” education bill advanced by DeSantis and other Florida Republicans. The Florida Legislature, at DeSantis’ urging, then dissolved the special taxing district created in 1967 that allowed the Disney to develop and control its property near Orlando, causing concerns about Disney’s debt and tax burden falling on local municipalities and taxpayers. Disney argues that DeSantis has waged a “relentless campaign to weaponize government power.”
New York Gov. Kathy Hochul wants more tax subsidies for the film industry. The Democrat proposes a 70 percent increase to New York State’s annual $420 million tax incentive program, up to $700 million a year. That could direct as much as $7.7 billion in tax credits to the film industry over the next 11 years. The idea is to attract film producers to the state, who in turn will create jobs for New York residents. But Reinvent Albany estimates that each full-time TV and film job created under the current program essentially costs taxpayers $66,819.
On May 16: “Raising Revenue from Corporations,” a virtual TPC and UNC Tax Center event. Join TPC and the University of North Carolina Tax Center for an event to discuss the new minimum tax on reported financial income of large US corporations, the excise tax on stock buybacks, and the proposed global tax agreement. Two expert panels will assess the effects of proposals to use corporate financial income as a tax base and to impose an additional tax on corporate share repurchases. The keynote speaker is Itai Grinberg, former deputy assistant secretary for multilateral negotiations at the US Treasury Department. He will discuss the new global tax agreement for multinational corporations rubber-stamped by the European Union, Japan, and other jurisdictions. Learn more and register here.
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