Modest progress in spending talks. Senate Majority Leader Chuck Schumer said he’s encouraged. House Speaker Nancy Pelosi said she still hopes that Congress will address the debt limit in a bipartisan manner, ideally this year, but a year-long spending bill is a higher priority. She told reporters, “If we can’t have a solution, we have no choice but to keep the government open with a year-long [continuing resolution]. It would be a last resort.”
Georgia on their minds. In yesterday’s webcast of TPC’s The Prescription, former Pelosi aide Arshi Siddiqui said talks over a year-end spending bill (perhaps including some tax provisions) might pick up after lawmakers know the results of the Georgia Senate runoff. If the Democrats hold the seat, they’ll have a slightly bigger majority next year, and Republicans may be more willing to negotiate in the post-election session. But if Republican Herschel Walker wins, the GOP may want to delay big issues until 2023. She also figures Congress will be squabbling at least until Dec. 23.
A brewing trade war over Buy America green energy subsidies. Europeans are furious about the Inflation Reduction Act’s green energy tax breaks that are available only for products produced in the US, often with US materials. The French raised objections during President Macron’s visit this week, and other trading partners have been quietly objecting as well. They’d like to see their products qualify as well and threaten retaliation if they are not. Biden told Macron that he is “confident” something can be worked out.
Treasury turns Trump tax returns over to House Ways & Means. The panel met yesterday to discuss how to handle six years of former President Donald Trump’s federal tax returns. But it was a strategy session — not a review of the returns. Making the returns public is complicated and may require the panel to first include them in a report to the full House.
TIGTA: IRS audits of Comey and McCabe were random. The Treasury Inspector General for Tax Administration, in a report released yesterday, found no IRS “misconduct” in its decision to conduct invasive audits of former FBI Director James Comey and Deputy Director Andrew McCabe. Both were on former President Trump’s enemies list. TIGTA reviewed the audit process and found the IRS chose tax returns for audit correctly and did not pick specific taxpayers to audit.
Washington Supreme Court: State can collect new capital gains tax. For now. The high court issued a stay this week on a lower-court ruling that a tax on gains exceeding $250,000 on the sale and exchange of stocks and bonds is unconstitutional. The Department of Revenue can collect the tax until the justices finally rule on the case. The first payments are due in April but the state will refund any taxes the high court declares unconstitutional.
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].