Policy/Legislation
Senate Blocks Debate on Bipartisan Infrastructure Until Bill Is Finalized: The Wall Street Journal reports that Senate Republicans blocked an effort to begin debate on a bipartisan infrastructure deal still under negotiation Wednesday, but lawmakers said they expected to reach final agreement by early next week. Senate Democratic leaders had hoped to start the process Wednesday of moving both the infrastructure bill and a separate $3.5 trillion package of tax increases, child care, education, social welfare and climate provisions expected to pass with only Democratic votes, the publication reports. The failed vote Wednesday pushed the timeline for both deeper into the summer. When the Senate voted, the bipartisan bill details were still being discussed and a major disagreement over how to pay for it was unresolved.
Democrats’ Tax and Spending Plans Face Hurdles: The Hill reports that President Biden and Democratic leaders face daunting hurdles as they fight to preserve a fragile bipartisan coalition crucial to the success of Biden’s legacy-defining economic agenda. Party leaders are treading a minefield as they seek to adopt both a massive infrastructure bill with Republican support, and a second, even larger Democratic package raising taxes and expanding social welfare benefits and environmental programs demanded by liberals — all without spooking moderate Democrats leery of deficit spending. Losing any one of those groups would likely sink the entire project.
State-by-State Tax Impact: Based on individual tax return data from the Internal Revenue Service at the congressional district level, the Tax Foundation’s new interactive tax map shows how individuals across the country would be impacted by the tax increases.
U.S. Chamber Warns Tax Increases Harm U.S. Workers and Threaten Recovery: A recent analysis by the U.S. Chamber of Commerce shows that there are 1.4 million small businesses with fewer than 500 employees that will be directly impacted by the President Biden’s proposed tax increases. Up to a million jobs will be lost and businesses will pass tax increases on to their consumers through higher prices and their workers through lower wages.
Budget Watchdog Says Tax and Spend Plan Will Cost Much More: The Senate may soon move forward on reconciliation instructions to allow for the enactment of $3.5 trillion in new spending and tax increases (on top of the proposed $579 billion bipartisan infrastructure package). However, the proposals outlined in a Senate Democrat fact sheet appear to cost far more than the $3.5 trillion advertised, the Committee For a Responsible Federal Budget (CRFB) recently posted on its blog. While the actual cost of this new legislation will ultimately depend heavily on details that have yet to be revealed, the CFRB estimates the policies under consideration could cost between $5 trillion and $5.5 trillion over a decade, assuming they are made permanent. In order to fit these proposals within a $3.5 trillion budget target, lawmakers apparently intend to have some policies expire before the end of the ten-year budget window, using this oft-criticized budget gimmick to hide their true cost.
Bill Would Expand Pass-Through Tax Deduction to Advisers: Legislation introduced Tuesday by the Senate’s top tax policy writer would make brokerages and investment advisory firms eligible for a small-business tax break established by the 2017 tax reform law, InvestmentNews reports. However, the bill also would limit the benefit to people earning less than $400,000. Sen. Ron Wyden (D-OR), chairman of the Senate Finance Committee, wrote the Small Business Tax Fairness Act, in part to expand the number of businesses set up as so-called pass-throughs — such as partnerships and sole proprietorships — that qualify for a 20% tax deduction. Under the 2017 bill, certain business categories, including financial services, accounting and law, were ineligible for the deduction. Real estate and insurance brokers can use it. The Wyden bill would eliminate those restrictions.
Legislation Targets Insider Trading: ThinkAdvisor reports that Rep. Carolyn B. Maloney, (D-NY), and Sen. Chris Van Hollen, (D-MD), reintroduced Thursday the 8-K Trading Gap Act, legislation to fix a loophole in current law that allows corporate executives to trade on information before it’s disclosed to the public and to their own shareholders. The 8-K Trading Gap Act would require public companies to put in place policies and procedures that are reasonably designed to prohibit officers and directors from trading company stock after the company has determined that a significant corporate event has occurred, but before the company has filed a Form 8-K with the SEC disclosing such event, the bill states.
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