TPC analyzed the major tax provisions in President Biden’s budget. Its analysis finds that Biden’s plan would raise average after-tax incomes for low-income households in 2024 and leave them effectively unchanged for middle-income households. The top 1 percent (those with at least roughly $1 million in income) would pay an average of $300,000 more than under current law, dropping their after-tax incomes by 14 percent. Those in the top 0.1 percent would pay almost $2 million more on average, a 20 percent reduction in after-tax incomes.
What’s in Treasury’s proposed budget? The budget presented to lawmakers this week by Treasury Secretary Janet Yellen requests $16.3 billion for discretionary spending in Treasury’s domestic programs. That reflects a $2.1 billion (15 percent) increase from last year’s enacted budget. The IRS budget request for fiscal year 2024 is $14.1 billion, $1.8 billion (about 15 percent) more than last year. Meanwhile, Yellen told lawmakers that she expects the plan for $80 billion in funding enacted in last year’s Inflation Reduction Act to be complete within weeks.
On Capitol Hill next week. On Tuesday, March 28, the House Ways & Means Committee will hear testimony from US Department of Health and Human Services Secretary Xavier Becerra on the department’s fiscal year 2024 budget request. On Wednesday, March 29, the House Budget Committee will hold a hearing on the fiscal state of the union. Also Wednesday, the Senate Finance Committee’s Subcommittee on Health Care will hold a hearing to examine the oral health crisis and related health disparities.
Missouri House approves state income tax rate cut. The Republican-controlled chamber advanced a bill that would reduce the state’s top income tax rate from 4.95 percent to 4.5 percent starting next year. It would also reduce the corporate income tax rate from 4 percent to 2 percent. The legislation would cost Missouri over $1 billion when fully implemented. The bill now goes to the Missouri Senate, which is considering its own legislation that would eliminate the corporate income tax.
Canada to propose a clean-tech investment credit. Canadian Finance Minister Chrystia Freeland will present a budget proposal to parliament on Tuesday calling for a 30 percent investment tax credit to boost clean-tech manufacturing. The bill reportedly targets the electric vehicle (EV) supply chain. The credit will be available for future investments in the equipment used to extract and process minerals critical to EVs and to purchase equipment – including batteries – used in manufacturing EVs. The credit would also apply to equipment that produces nuclear energy fuels, solar panels or wind turbines.
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].