See you next year. President Biden conceded that the Senate won’t approve his social spending, climate, and tax bill this year. In a statement last evening, the president said, “We will advance this work together over the days and weeks ahead; Leader Schumer and I are determined to see the bill successfully on the floor as early as possible.”
Inflation is high but Build Back Better’s impact would be modest. As Senate action on the Build Back Better (BBB) Act looks poised to slip into early 2022, the Federal Reserve’s plans for interest rate hikes have added fodder to the debate over fiscal policy and high inflation. Many economists think BBB would only add modestly to higher prices. “I don’t think it’s helpful, but I think the increase will be modest enough that it shouldn’t be a main concern about the bill — it should be pretty far down the list,” TPC’s Ben Page told CNN.
Elon Musk already owes billions to the IRS. A recent Tweet from Sen. Elizabeth Warren focused on newly-minted TIME magazine person of the year Elon Musk as an example of billionaires failing to pay their fair share of taxes. That prompted the Tesla and SpaceX founder to respond that for 2021 he’ll owe more taxes “than any American in history.” That’s largely because he recently exercised more than 2 million soon-to-expire stock options and sold nearly 1 million shares of his company. Bloomberg estimates his tax bill at about $10 billion. Musk’s net worth is currently estimated at around $250 billion.
Mexico pushes back on proposed US electric vehicle tax credits. Speaking of Build Back Better, the plan would boost the existing $7,500 electric vehicle tax credit by an additional $4,500 for EVs assembled in the US by union labor, and another $500 for domestically-produced batteries. The bonus already has drawn the ire of Mexico, with President Andres Manuel Lopez Obrador claiming it would violate the United States-Mexico-Canada Agreement.
OECD Pillar 2 plans leak. Law360 obtained a copy of the draft rules for a 15 percent global minimum tax to accompany the deal being devised by the Organization for Economic Cooperation and Development. The levy would apply to firms that report at least $845 million in gross annual revenue in two out of their last four annual financial statements. About 140 countries have signed onto the framework and the OECD is expected to issue the formal proposal later this month.
Taxing California mansions to help fight homelessness. Housing advocates in California are pushing to include a ballot measure next November to authorize a tax on home sales of $5 million or more to help alleviate homelessness. The revenue would fund permanent housing for those who are homeless or at risk.
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. Renu Zaretsky is on vacation until December 29. Until then, email John Buhl at firstname.lastname@example.org.