Biden signs short-term spending bill. The federal government is funded until Dec. 16 but Congress still needs to resolve a number of issues before it can pass a permanent spending bill for the rest of the fiscal year.
A lame duck tax bill? Once Congress returns for a post-election session, it has a number of tax issues it could address. On the list: restoring key business tax breaks and a more generous Child Tax Credit that all expired this year. Separately, it also could pass a package of retirement savings incentives that have bipartisan support.
This week’s The Prescription webcast: the prognosis for those retirement savings bills. Former Deputy Assistant Treasury Secretary for Retirement and Health Policy Mark Iwry will talk about those retirement savings bills on this week’s episode of TPC’s webcast The Prescription. To join Iwry and host Howard Gleckman at noon on Thursday, register here.
Arizona Gov. Ducey: Flat tax will come one year early. Republican Gov. Doug Ducey says Arizona’s 2.5 percent flat rate income tax will go into effect on Jan.1, 2023, a full year ahead of schedule. The Joint Legislative Budget Committee and Ducey administration determined that since general fund revenues exceed the statutory threshold, the 2.5 percent rate could go into effect immediately. The average Arizona family will save $350 annually.
Los Angeles voters to decide on “mansion tax” in November. The ballot measure would levy a new tax on commercial and residential property sales that exceed $5 million, generating an estimated $600 million to $1.1 billion annually. Revenue would fund homeless housing and services. The Los Angeles Times reports the city’s mayoral candidates have not backed the proposal, saying voters must first trust that government will spend funds effectively and efficiently.
California Gov. Newsom wants a windfall profits tax on oil companies. The Democratic governor last week called for a windfall tax on oil companies that would be refunded to California taxpayers who have been affected by high gas prices. He has not provided details.
India cuts its windfall tax on crude oil and diesel exports. The government cut the tax from ₹10,500 (about $129) per metric ton to ₹8,000 (about $98). It also repealed an export tax on jet fuel, and cut an export tax on diesel from ₹10 per liter to ₹5 per liter (12 cents to 6 cents). India made the moves because of falling oil prices.
UK Prime Minister Liz Truss: Mistakes were made. Following widespread criticism of her government’s plan for a major tax cut, she blamed bad marketing– and her Chancellor of the Exchequer. She told BBC News that her administration “should have laid the ground better” for a mini-budget that resulted in market chaos and a weakened pound. Then she said her cabinet had not agreed to the tax cuts, which she insisted were the idea of Chancellor Kwasi Kwarteng. But she also said her government was standing by the plan.
Congress is not in session. The Daily Deduction will post Mondays until Congress returns.
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 [email protected].