We retired Tax Justice Blog in April 2017. For new content on issues related to tax justice, go to www.justtaxesblog.org
In the first two days of the new Congress, 21 bills to amend the tax code were introduced in the House of Representatives. The 113th Congress officially convened at noon on January 3rd and by the end of the business day on January 4th, House members had introduced 218 bills and over 40 resolutions. (By way of comparison, the 112th Congress passed only 219 bills during its entire two-year session, making it the least productive Congress on record!)
Bills to reduce taxes and revenues outnumber other kinds of tax proposals. For example, there are two designed to abolish the estate tax forever. There are proposals to repeal the 16th amendment, (that allows Congress to collect taxes in the first place), and to eliminate the Internal Revenue Service. Subtler proposals are special interest giveaways. For example, there’s one that would extend tax-free health savings accounts to church-based health insurance co-ops, another that would roll back transfer taxes on farmland and a couple designed to expand or entrench the obscenely expensive (PDF) research tax credit for business. And one more asks Congress to commit to protecting the tax break that experts across the ideological spectrum would like to see end: the mortgage interest deduction on second homes.
It’s worth mentioning that the anti-tax beast is not just a Beltway menace; similarly radical ideas are on the agenda in the states, too. As recently as November 2012, voters in 11 states faced 17 tax-related ballot initiatives, and most of them would have exacerbated income inequality and drained revenues. (Some prevailed, some did not.) Looking ahead, some 30 states are looking at tax changes of some kind this year and 15 are likely to undertake a substantial overhaul of their tax codes. Only a few, however, will be doing it in a way that makes their tax systems more fair and sustainable, and too many proposals mimic the disastrous laws already passed in states like Kansas and Michigan.
The federal fiscal cliff deal that left 85 percent of the Bush era tax cuts in place indefinitely was a bad deal for most Americans; it raises too little revenue and leaves all of the same breaks and loopholes available to the very rich and the large corporations. The lobbyists who brought you that stinker were back at work on January 2nd pushing for more, and their friends in the 113th Congress seem all too happy to help.