The Ferguson Group Blog

House Votes For Permanent Internet Tax Ban

Earlier this week, the House passed by voice vote legislation permanently banning internet access taxes – a blow to local and state governments counting on the tax as a current or future revenue stream. 

H.R. 3086, the “Permanent Internet Tax Freedom Act,” permanently extends the moratorium first enacted in 1998 and removes the exemption enjoyed by seven states.  The bill does not address the matter of sales tax collected on interstate online purchases.  Wireless industry representatives supported passage.

Action now moves to the Senate where Sen. Ron Wyden has sponsored similar legislation.  Many local governments and organizations such as the National Association of Counties have voiced strong opposition to Senate offices.  Sen. Wyden said he is consulting with his colleagues regarding moving the bill forward but he has not indicated a timeframe within which he hopes see action on his bill.

Senators Propose 12 Cent Gas Tax Hike

On June 18 Senator Chris Murphy (D-CT) and Senator Bob Corker (R-TN) released their proposal to increase the fuel tax by 12 cents over two years to create revenue necessary to shore up the Highway Trust Fund and pay for a long term transportation authorization bill.

Senator Murphy wrote notes in a press release “…the purchasing power of the gas tax is approximately 63 percent of what it was in 1993…” when last the tax was increased.  The Senators’ proposal would increase the federal gasoline and diesel taxes by six cents in each of the next two years. According to the Senators, this increase would provide enough funding to offset current MAP-21 spending levels over the next 10 years and replace all of the buying power the federal gas tax has lost since it was last raised in 1993.

The plan also would index the gas tax to inflation, using the Consumer Price Index (CPI), to ensure that it remains viable into the future.

The press release with a link to a one-page fact sheet is located here:

http://www.murphy.senate.gov/newsroom/press-releases/murphy-corker-unveil-bipartisan-plan-to-shore-up-highway-trust-fund-boost-economic-growth

What are your thoughts on this proposal?

Congress Gets in the Spirit of the Olympics

It is no secret that medalists in past Olympics have had to pay taxes for their winnings. The Americans for Tax Reform group has estimated that a gold medal could result in a $9,000 tax burden.  That is why lawmakers in the U.S. House of Representatives have introduced the Tax Exemptions for American Medalists (TEAM) Act (H.R. 3987), which would exempt Olympic winners from paying taxes on their awards, including medals and cash rewards given to winners by the U.S. Olympic Committee.

Not all countries give their Olympians cash awards for earning medals. The U.S. Olympic Committee awards athletes $25,000 for gold, $15,000 for silver, and $10,000 for bronze.  Modest earnings compared to top payer Russia, who gives their athletes $135,000 for gold, $81,000 for silver, and $54,000 for bronze. One would think that smaller countries are the ones that don’t receive cash awards, but no, that is not always the case.  Interestingly enough, British athletes don’t receive a cent. Even more interesting, the highest paid gold medal athletes will come from Georgia, receiving $1.2 million for their earned gold medal.  

The United States is not the only country working on changing their tax code to provide an exemption for their athletes. Just last week, lawmakers in the Philippines introduced a bill that would provide a tax exemption for prizes and awards earned by Filipino athletes in any internally-sanctioned sporting event. Their bill, however, provides an exemption for all prizes and awards for winning athletes in the last 10 years. The U.S. TEAM Act would provide the tax exemption to athletes starting this year.

The H.R. 3987 is the second attempt in the past few years to provide a tax exemption to winning athletes. In 2012, Senator Marco Rubio (R-FL) and Representative Blake Farenthold (R-TX²⁷) (the 2014 bill sponsor) introduced the TEAM Act without success. Currently, there is no companion bill to the TEAM Act in the Senate.