Progress Toward A Spending Package
The House passed legislation to avert a partial government shutdown. The package of six bills reflects the compromise reached between the House and Senate earlier this week. The Senate is expected to vote on the six bills soon. If the bills are not passed, funding for four federal agencies will expire tomorrow night, and funding for eight other federal agencies will expire March 22.
Americans have saving and spending plans for their tax refunds. The average refund as of Feb. 10 was about $1,700, according to the IRS. A Bankrate survey finds that about nearly 30 percent of taxpayers plan to save their refunds, while 19 percent plan to pay down debt. About one in five taxpayers plan to splurge on fun expenses like vacations, home improvements or retail therapy.
How to build a state child tax credit (CTC). So far, 15 states offer a state CTC, but their structure and sizes vary considerably. How and why? TPC’s Richard Auxier, David Weiner, and Nikhita Airi have a new report that summarizes and explains the policy levers involved in designing a state CTC. They use TPC’s state tax model to simulate CTCs in Illinois, Michigan, Nebraska, and Virginia—four states that currently offer no CTC.
Save March 19 and dream the impossible dream of radical tax simplification. The Brookings Institution will host an in-person and virtual event that Tuesday morning. After opening remarks by TPC’s Tracy Gordon, TPC’s Bill Gale will review the prospects for tax simplification and consider four revenue-neutral proposals for federal income tax reform. The proposals each could create a simpler and more progressive tax system. TPC’s David Weiner will demonstrate a new online TPC tool that allows a user to compare filing requirements and tax burdens under the current system and the four alternatives. A subsequent panel discussion moderated by The Wall Street Journal’s Richard Rubin will feature TaxNotes’ Ariel Greenblum, TPC’s Margot Crandall-Hollick, and Yale University’s Natasha Sarin. Learn more and register here.
UK’s finance minister announces another tax cut. British Treasury chief Jeremy Hunt yesterday announced a 2-percentage-point reduction in the national insurance rate, bringing the rate to 8 percent. He opted to keep the basic rate of income tax at its current level and plans to freeze taxes on alcohol and gas. Hunt also said that starting in 2025, new arrivals to the UK will need to pay the same tax as other UK residents after completing four years of UK residency.
Real Madrid coach accused of tax fraud. Spanish state prosecutors have accused the Italian soccer coach Carlo Ancelotti of tax fraud, asserting he hid his income from image rights and declared only income received from the Real Madrid team. They claim he defrauded the Spanish government of €1 million in 2014 and 2015 through a “confusing” system of shell companies. The companies, according to prosecutors, lack “any real activity” based outside Spain “so that neither he nor the mentioned companies had to pay taxes on the large sums earned in Spain or outside.”
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