FL - Solid mineral tax rates for 2024 announced
Florida has released the severance tax rates on the production of heavy minerals and other solid minerals for 2024. From […]
Read MoreWith the transition of leadership from Democrats to Republicans in the House of Representatives comes new rules that legislators must adhere to, and they could have implications on tax policy.
The rules, which were adopted January 9, 2023, almost exclusively along party lines (only one Republican voted against and no Democrats voted in favor), contain two key provisions that could impact tax policy in at least the next two years. First is the need for a supermajority of lawmakers to vote in favor of a tax rate increase and the second is a replacement of the “pay as you go” rule {any increase in spending needs a mechanism to fund the increase) to a “cut as you go” rule, which means any increase in spending in one area must be offset by a cut of funding in another area.
A summary of the rules states that it “restores a requirement for a three-fifths supermajority vote on tax rate increases.” This is likely to have little impact as there likely will not be many, if any, proposals to increase taxes coming out of the GOP-led House, especially considering many Republicans signed a pledge to oppose increase taxes.
“While it is unsurprising that Republicans approved this rule, it undermines the stated goal of lowering the debt,” Joe Hughes, federal policy analyst at the Institute on Taxation and Economic Policy, stated in a blog on the rules. He added that “there is a clear contradiction in stating that government should take on less debt while putting tight restraints on the government’s ability to pay for things.”
The second provision, cut as you go, requires that increases in mandatory spending programs, including programs such as Social Security, Medicare, veterans’ benefits and unemployment compensation, be offset by cuts to other mandatory spending programs.
“This means that the House cannot even pass increases to these programs that are fully paid for with new revenue, unless they also cut some other program in this category,” Hughes notes.
This could make passage of enhancements to popular tax provisions more problematic. For example, the cut as you go rule “makes it harder to enhance proven and effective policies like the Child Tax Credit (CTC) or Earned Income Tax Credit (EITC) because the refundable portions of the credits—the amount that can exceed the income tax a family would otherwise owe—are counted as mandatory spending under the budget scoring rules used by Congress,” Hughes writes, noting that any improvements would require cuts to another essential program like Social Security or Medicare.
“Advocates and lawmakers hoping to restore the 2021 expansion, or otherwise improve the CTC or EITC, will now face an even tougher road ahead” due to the cut as you go rule, he states.
Florida has released the severance tax rates on the production of heavy minerals and other solid minerals for 2024. From […]
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