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A Bipartisan Breakthrough, A Budget Boost

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Progress toward the outline of a potential agreement. That’s how White House press secretary described a possible deal on an infrastructure plan between a bipartisan group of senators and top White House aides. The senators said last night they had reached tentative agreement on how to spend about $1 trillion, including about $579 billion in new money. The senators said they also agreed on how to pay for it though those details remained murky. They will meet with Biden again today to try to nail down the deal. 

House Democrats propose a $1.7 billion IRS budget increase for 2022. Democrats on the House Appropriations Committee have released a draft bill to boost IRS funding by about 14 percent, to $13.2 billion in base funding with an extra $417 million to reduce the “tax gap” between taxes paid and taxes owed. This matches President Biden’s request. A subcommittee will review the bill today.

Arizona Senate approves a massive tax cut. The Republican-controlled Senate passed a $12.8 billion budget that includes a new two-rate income tax. Currently, Arizona’s graduated rate structure ranges from 2.59 percent to 4.5 percent. The proposal would create just two rates:  2.55 percent on households earning up to $27,272 annually, and 2.98 percent on any excess. Governor Doug Ducey says he’s optimistic the House will pass the budget today. 

ETAAC releases its annual report to Congress. The IRS’s Electronic Tax Administration Advisory Committee (ETAAC) made 10 recommendations to reduce identity theft and refund fraud. They include changes in the IRS budget, new information returns, federal data sharing, and electronic filing and cybersecurity. The 2021 Report to Congress is available on the IRS website.

Save the date: July 13 for BEPS & Biden. Join TPC (virtually) on July 13 from 10:30 am to noon to hear from leading experts on international corporate tax reform. They’ll be discussing  the Organization for Economic Cooperation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). How might the effort interact with  Biden’s proposals for US corporate tax reform? Pascal Saint-Amans, director of the OECD’s Center for Tax Policy and Administration, will deliver the keynote address. Learn more about the event and register here.

 

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 dailydeduction@taxpolicycenter.org.

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