About that possible government shutdown… The Senate passed a continuing resolution to fund the government through December 11. Senate Majority Leader Mitch McConnell and outgoing Speaker of the House John Boehner will meet with President Obama “soon” for budget negotiations, and the House is on track to approve a short-term spending bill, too. Now Congress just has to figure out how it will fund the government after December 11.
While the House prepares to vote to repeal a big chunk of the ACA… yet again. This time, they’d include repeal of the individual and employer mandates, the Cadillac Tax, and the medical device tax in their version of a budget resolution. If the bill could pass the Senate, it would become veto bait and create another fiscal standoff (see above).
Senator Chuck Schumer and House Ways & Means chair Paul Ryan want a deal on tax and infrastructure funding. The bipartisan pair would love a marriage between international tax reform and infrastructure funding, but not many in Congress want to attend the wedding. Senator Ron Wyden said, “There’s certainly going to be a vigorous debate about rates.” But “the biggest challenge is the difference of opinion that Republicans have between themselves.”
One House Republican would like a six-year highway bill. Kevin McCarthy, the current House Majority Leader who would like to be Speaker, vows to pass a long-term extension of federal highway funding. Congress has until October 29 to extend the Federal Highway Trust Fund.
Does Donald Trump have a plan to pay for his tax cuts? The Tax Foundation’s dynamic score of the GOP candidate’s tax plan concludes it would cut taxes by $10.14 trillion over the next decade. The static score: a tax cut of $12 trillion. With interest, Trump would have to cut projected government spending by one-quarter to avoid adding to the debt. In other news, Forbes reports that Trump is worth about $4.5 billion, but the candidate himself maintains his worth is “in excess of $10 billion.” Dynamic scoring, perhaps?
Did Volkswagen deceive the US government to secure tax breaks? The German automaker, along with other auto manufacturers, lobbied for $50 million in tax breaks to help market its diesel cars. If they planned to trick US authorities, VW executives could be charged with criminal tax fraud. The US could also bring a claim against VW under the False Claims Act. Firms are not allowed to lie to the US (by manipulating software to allow a vehicle to pass an emissions test) in order to obtain a government benefit (a tax credit for a low-emissions alternative fuel vehicle).
A tax loophole in the hedge is worth a hundred in private equity? Or something. Bloomberg examines whether ending the carried interest loophole, whereby investment gains earned by fund managers are taxed as capital gains, not ordinary income, concerns hedge fund managers. Short answer: No. Private equity investors stand to lose a lot more. Said one hedge fund manager: “The people who benefit aren’t the one percenters. They’re the one basis pointers.” That’s investment-speak for the 0.01 percenters, which is math-speak for uber-wealthy.
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