No Congressional Approval Of A Spending Deal Yet, But Plenty Of Commotion

In the spending bill, inversion curbs could be curbed. The bill to fund the government through September 2015, scheduled for a House vote today and a Senate vote after that, waters down Democratic-supported curbs on corporate inversions. The Ds would have barred companies that move their tax addresses outside the country from getting US government contracts, but the latest deal would continue to allow them. Such changes have not been sitting well with Democrats. Dozens of House Republicans are also unhappy with the bill because it fails to block President Obama's executive orders on immigration.

More Senate Democrats are lining up to oppose Treasury nominee Weiss because of his inversion history. Jeanne Shaheen, Joe Manchin, and Al Franken have joined  Elizabeth Warren and Dick Durbin and Independent Bernie Sanders in opposing Antonio Weiss as nominee for Treasury undersecretary for domestic finance. Other Democrats are waiting to meet him to decide. If confirmed, Weiss's main responsibility would be to manage the issuance of the nation's debt, but he'd also coordinate policies on banking and capital markets, and work on implementation of the Dodd-Frank financial law.

Meanwhile, Maryland Senator Ben Cardin has a plan for what looks a lot like a VAT. Tax Analysts shares the Democrat's plan (paywall) for a Progressive Consumption Tax.  At 10 percent, the destination-based levy would be charged at each stage in the production or the distribution of a good or service. Exports would be exempt. Imports would be taxable. Revenue from the PCT, Cardin says, would replace income tax liability for most households  and reduce the corporate income tax rate. Cardin has no estimate of the budgetary impact of the tax. Cardin's interest in such a tax is not new–back in 2013, Cardin urged then-Finance Committee Chair Max Baucus to consider a consumption levy as part of tax reform.

Did the IRS make improper payments of Additional Child Tax Credit? According to the Treasury Inspector General for Tax Administration's report, the answer is yes: Payments were made to parents who used federal individual taxpayer identification numbers (ITINs) instead of a Social Security number. But the IRS, having used its legal authority to determine eligibility, says that the payments are in fact proper and that children of parents using ITINs are not excluded from the credit. Parents with ITINs are often taxpaying, undocumented immigrants with US-born children. Their eligibility for tax credits has been a source of consternation among some lawmakers for some time.

Myth Busters: US Multinational Edition. University of Pennsylvania's Chris Sanchirico dismantles the argument that a one-time repatriation tax holiday—allowing corporations to bring earnings home at a lower tax rate—is a good idea. Chris argues that the money is already back in the U.S. and it isn't the most cost-effective way to pay for infrastructure as President Obama would like. Besides, it's not likely to be a one-time holiday, since the US already had one in 2005 and probably will have others. Revenue might grow in the short term as firms bring back old cash, but they'd likely stash future earnings offshore until the next one-time holiday.

Speaking of multinationals, several big name corporations' tax deals in Luxembourg have been leaked. Among them are Disney, Koch Industries, and Skype. There's nothing illegal about avoiding taxes, but the complex structures used to reduce tax bills are targets of lawmakers in the US and abroad. The International Consortium of Investigative Journalists reports that hundreds of millions of dollars in profits between 2009 and 2013 were channeled through Luxembourg subsidiaries that faced tax rates of less than 1 percent.

Are US corporations really over-taxed? Tune in today to find out. TPC and the Penn Wharton Public Policy Initiative host the event. Doug Holtz-Eakin, President of the American Action Forum, will be the keynote speaker. Jeanne Sahadi of CNN Money moderates a panel including TPC's Eric Toder, Penn Wharton's Jennifer Blouin and Michael Knoll, and Treasury's James Mackie. The webcast will air live at 12:15 pm.

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