A roundup of this week's tax news(Read article summary)
This week, the DC Council voted to support $165 million in tax cuts and Rhode Island considers a bill to cut the state's corporate income tax rate. Renu Zaretsky has the scoop on the latest in taxes.
Melanie Stetson Freeman/Staff/File
Washington residents will likely see tax cuts—the largest in 15 years. The DC Council voted yesterday to support $165 million in tax cuts, a plan based in part on recommendations made by the DC Tax Revision Commission. Tax burdens for low- and middle-income residents would decrease in January. For four years after, businesses, residents earning up to $1 million annually, and those who inherit multi-million-dollar estates would also enjoy tax relief. Lame-duck mayor Vincent Gray had earlier backed revenue generating aspects of the commission’s plan. Council Chair Phil Mendelson, who brought the plan to a Council vote, offset the tax relief package with funds set aside for street cars. The plan will have its final vote next month and is expected to pass.
There’s a lot of support to cut New England’s highest corporate tax rate. Rhode Island’s Senate Finance Committee is considering a bill to cut the state’s corporate income tax rate from nine percent to seven percent and change the way some corporations are taxed. The Committee heard from a broad range of supporters who want to see the state become more competitive with other states and more attractive to corporations.
Tax increases in France, designed to cut the nation’s deficit, aren’t cutting it. French tax receipts in 2013 did grow by 15.6 billion euros since 2012, but they fell short of expectations by 14.6 billion euros. French households may be feeling some pain from the higher tax burden: Consumer spending has dropped .5 percent in the first quarter of 2014 and an additional 0.3 percent in April.
Big code on campus? The tax code could be changed in a number of ways to make higher education more affordable for middle-class families, according to a new report from the Center for American Progress. The report suggests changes to, among other tax provisions, college savings incentive programs, the American Opportunity Tax Credit, and the student loan interest deduction. Every bit certainly helps, given student debt loads.
How do you solve a problem like greenhouse gases? They’re a non-toxic global pollutant and they come from a variety of sources in a variety of states. But the Environmental Protection Agency is required under the Clean Air Act to set emissions standards for each source, while states are expected to write compliance plans for each. This makes no economic sense, says Adele Morris of the Brookings Institution. In her TaxVox post she considers three better options: 1) a national carbon tax, 2) state carbon taxes in lieu of EPA emissions standards, or 3) an EPA-approved plan for states to use a carbon tax as part of their Clean Air Act compliance plans.