Tax Refund


“If I only could, I’d make a deal.” The House-passed tax bill may soon die on Capitol Hill.  Bloomberg reports that Senate Republicans may tank the $78 billion tax cut bill passed by the House earlier this year due to pressure from those opposed to the bill’s child tax credit provisions. The hope: Bigger tax breaks for business are on the horizon, assuming Republicans win the majority in the November election. But if Senate Majority Leader Chuck Schumer puts the bill to a vote on the floor, Republicans would have to vote against tax break extensions long sought after by the business community. 

“Be runnin’ up that road.” There’s much more from Capitol Hill this week. The House Ways & Means Work and Welfare Subcommittee holds a field hearing tomorrow in Chicago, while the full panel holds a hearing on Thursday on how to build on key provisions of the Tax Cuts and Jobs Act of 2017. Also tomorrow: the Senate Committee on Banking, Housing and Urban Affairs will receive an update from Treasury Deputy Secretary Wally Adeyemo on countering illicit finance, terrorism and sanctions evasion. On Wednesday, the House Committee on Small Business will hold a hearing on the effects of taxes and tax code complexity   and the Senate Budget Committee will hold a hearing on offshore tax evasion. On Thursday the Senate Finance Committee will hold a hearing on supporting chronic care through Medicare Physician Payment

“Be runnin’ up that building.” Treasury and IRS released guidance on the tax treatment of rebates for energy efficient property and improvements. Generally, taxpayers who receive rebates for the purchase of energy efficient homes or renovations—made possible through the Inflation Reduction Act—will not need to include the value of those rebates as income on their tax returns. But, they will need to reduce the basis of the property when they sell it by the amount of the rebate. 

“You don’t wanna hurt me…” A bipartisan group of Kansas lawmakers sank a tax cut deal. Democratic Gov. Laura Kelly and Republican state Senators had reached a deal on a $1.4 billion tax cut package, but a bipartisan group of House lawmakers scuttled the bill in the lower chamber on a voice vote. The House and Senate now need to draw up a new plan. Republicans want a bigger plan, Democrats don’t want tax cuts to disproportionately favor higher earners, and lawmakers in both parties want bigger cuts to property taxes. 

“Unaware I’m tearin’ you asunder.” California companies have come together in an effort to curb local taxation. A group of businesses have collected enough signatures to add a measure to November’s California ballot. The initiative would require two-thirds of voters to approve most local tax increases and roll back some recently enacted increases. It would be one of the most significant revenue measures since 1978’s Proposition 13, which voters approvedto severely limit property tax increases.

“Let’s exchange the experience.” Did you miss these events last week? TPC’s Janet Holtzblatt, Robert McClelland, and Gabriella Garriga recount how the home mortgage interest deduction reinforces racial disparities, highlighting finds from a new TPC report presented at a TPC virtual event. TPC’s Howard Gleckman reviews law professor Michael Graetz’s new book, The Power To Destroy: How the Anti-Tax Movement Hijacked America. Graetz joined Steven Dean (Boston University), Douglas Holtz-Eakin (American Action Forum), and Vanessa Williamson (TPC and Brookings) to examine the issue in a TPC-Brookings event moderated by Brookings’ David Wessel. 

 

With special thanks to songwriter Kate Bush.

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].

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