Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories. MORE ON DIGITAL TAXES: It should be noted — Canada’s announcement that it was moving forward with its digital tax came right as negotiators blew past another deadline for the global tax deal. The Organization for Economic Cooperation and Development had hoped to finish off a treaty for the first pillar of the global agreement — the part meant to make digital taxes obsolete — by the end of June. Top OECD officials have said they’re still making progress on key obstacles in those talks, though some of the disagreements are quite stark — and any Pillar One agreement would essentially be dead on arrival in Congress, at least for the time being. Still, both USTR and business advocates here in America have knocked Canada for taking action outside of that global framework. The Information Technology Industry Council, which represents a range of Silicon Valley titans, called on the Biden administration to “immediately address” Canada’s digital tax. “At the same time, we hope negotiators can work beyond this troubling development and advance their effort to reach a multilateral, consensus-based solution to address the tax challenges arising from digitalization,” said Megan Funkhouser, ITI’s senior director of trade and tax policy. THIS WEEK ON THE HILL: Both the Senate Finance and House Ways and Means committees are pressing ahead with tax-related business this week, amid the expected hullabaloo over President Joe Biden’s current standing among his fellow Democrats. On the Senate side: The Finance Committee will continue its under-the-radar work to get the U.S. Tax Court back up to full staffing. Six of the court’s 19 seats currently are vacant, though three nominees sailed through the Finance panel last month and await action by the full Senate. Another three nominees are scheduled to get a hearing before the Finance Committee on Wednesday, all with the sort of resume that would seem to attract support among tax writers. One of this round of Biden’s picks for the Tax Court, Jeffrey Arbeit, has worked for JCT for close to a decade. Cathy Fung, another nominee, works in the IRS chief counsel’s office, while the third, Benjamin Guider, works in private practice. Over to the House: Ways and Means is convening a markup of four tax-related measures on Tuesday, as the panel continues to increase the pressure on elite colleges and universities. Smith already has questioned whether schools like Harvard and MIT have jeopardized their tax exemptions through their response to the war between Israel and Hamas, and one of the bills up for debate on Tuesday would put new standards in place requiring the IRS to examine the status of universities found to have committed civil rights violations. Ways and Means will also consider a measure that could cause up to another dozen colleges to pay the endowment tax from the GOP’s 2017 tax law, provided they don’t take steps to enroll more American students. Another bill would pave the way for the next Congress to potentially roll back regulations that the Biden administration has finalized for electric vehicle tax credits authorized by the Democrats’ 2022 tax-and-climate measure — rules that Republicans argue would offer a boost to Chinese companies. And the final piece of legislation brings back a proposed expansion of the tax-advantaged 529 accounts that proved controversial when it was part of — and then stripped out of — a large retirement package back in 2019. In many ways, those proposals could be viewed as election-year fare. But the bills could also shed some light on how Republicans might proceed in the negotiations over the temporary provisions from the Tax Cuts and Jobs Act that will expire at the end of 2025, particularly if the GOP sweeps in November — showing once more that Republicans are interested in targeting the green energy tax breaks from the Inflation Reduction Act, and more than open to finding ways to hike taxes on Ivy League schools and other most selective universities.
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