Pensions and tax bases: What to look out for in taxes this week.
The House Ways and Means Committee will vote on how to fix Highway Trust Fund on Thursday. In Flint, Michigan, the city wants to cut its retirees' health benefits to avoid bankruptcy.
The House Ways and Means Committee will vote on how to fix Highway Trust Fund on Thursday. In Flint, Michigan, the city wants to cut its retirees' health benefits to avoid bankruptcy.
The thing about pension smoothing: The bumps always come back.聽Neither the Committee聽for a Responsible Federal Budget nor TPC鈥檚 Len Burman will聽suspend disbelief聽when it comes to the latest gimmick to patch the Highway Trust Fund. Maybe 鈥渟tupid tax tricks鈥� work politically but 鈥減retending to raise revenue, while adding to our long-run fiscal woes and undermining the retirement security of American workers鈥� is a real wrong turn. The House Ways & Means Committee聽votes on this today, and聽expect a full vote聽on the House floor next week.聽Sources say聽members of the Senate Finance Committee have reached a tentative deal on a similar measure.
Public pension obligations in Flint may put the city on Detroit鈥檚 path.聽The former auto-industry boomtown in Michigan has a severely eroded tax base, and聽wants to cut its retirees鈥� health benefits聽to avoid bankruptcy. A judge will soon decide if Flint can. Flint鈥檚 budget deficit is $12.9 million, and wants to find $5 million this fiscal year by increasing retiree contributions to health insurance and requiring higher deductibles and co-pays.
The fiscal state of states includes a public pension report card.聽The聽latest State Economic Monitor聽from TPC鈥檚聽State and Local Finance Initiative聽notes trends in employment, state government finances, housing, and economic conditions. Overall, nearly all states enjoyed economic growth in 2013, but tax revenues are down this year and may fall further. Its report card on public pensions, in a special supplement from the Urban Institute鈥檚 Program on聽Retirement Policy, evaluates pension financing, the level of retirement security offered to short- and long- term employees, and workforce incentives. The message: There鈥檚 room for improvement.
India鈥檚 financial report card shows room for improvement, too.聽Asia鈥檚 third largest economy聽collects taxes totaling less than 9 per cent of GDP, a quarter of the average in the OECD group of developed nations. Its Finance Ministry yesterday called for lower spending on food and fertilizer subsidies and broadening the tax base. But tax reform would be聽no easy task.
How about a common corporate tax base for the European Union?聽The future European Union Commission President Jean-Claude Juncker would like one. That way,聽corporate taxes聽would be paid where profit is made, removing unfair competition among EU states over tax rates.