McCarthy will meet with Biden on Wednesday. The House Speaker said yesterday he’ll meet with President Biden on Wednesday to talk about raising the debt limit in return for “reasonable and responsible” spending reductions. McCarthy said on Face The Nation that Republicans would not target Medicare and Social Security but said defense spending may be on the table and that he would aim to eliminate “waste.” The White House says Biden will insist McCarthy propose specific spending cuts before substantive talks proceed.
Tax Compliance: Dodgers, Avoiders, and Evaders, Oh My! Is a tax cheat the same as a tax dodger? What is the difference between avoiding taxes and evading them? TPC’s Steve Rosenthal and Howard Gleckman explain that nobody can agree. They take a walk along the tax compliance continuum, which perhaps unsurprisingly and unfortunately, looks like many shades of gray. Among other problems, they say, “this confounds the way we think about the tax gap—the difference between taxes owed and taxes paid.”
Speaking of tax compliance: UK PM Sunak fired Conservative Party chair. Under pressure, Prime Minister Rishi Sunak fired Nadhim Zahawi for a “serious breach” of the Ministerial Code. Zahawi faced criticism for his personal tax arrangements and for allegedly failing to report his tax dispute and settlement payment to government authorities. Former Prime Minister Boris Johnson appointed Zahawi finance minister last July. When Sunak became PM, he made Zahawi party chairman.
Connecticut senators get on the tax-the-rich bandwagon. TaxNotes reports (paywall) they, like lawmakers in seven other states, would raise taxes on the wealthiest individuals and C corporations. S.B. 774 would tax income between $250,000 and $500,000 at 7.2 percent (up from 6.9 percent), and income over $500,000 would be taxed at 7.49 percent (up from 6.99 percent). Top bracket taxpayers also would pay a 5 percent surcharge on capital gains. The bill would raise the corporate tax rate from 7.5 percent to 11.5 percent and impose a 10 percent tax on the gross revenue of businesses with more than $10 billion in digital advertising revenue.
Israel’s Cabinet trashes tax increase on disposable plastic goods. Its coalition government had imposed a tax on disposable plastic goods but the new conservative cabinet scrapped it under pressure from some ultra-Orthodox representatives. The government says it will try to find another way to reduce the use of disposable plastic goods.
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].