What better way to spend Valentine's Day weekend than with presidential contenders? It's President's Day weekend, too, after all. Last night Democratic hopeful Bernie Sanders noted that his tax increase would reduce average health insurance premiums by $5000 a year. Competitor Hillary Clinton said those numbers don't add up. Meanwhile, you can spend Saturday evening with the GOP hopefuls. And (or) read up on what you need right here.
Tax cuts: Too easy to make? TPC’s newly released analysis of Marco Rubio’s tax plan examines how the GOP presidential hopeful would replace the federal income tax with a progressive consumption tax. Rubio would cut taxes at all income levels, but he’d pay a big price: Without offsetting spending cuts, the nation’s debt would explode. As TPC’s Howard Gleckman highlights, most of the $6.8 trillion in tax cuts would go to high-income households. Moreover, with interest costs, “Rubio would add nearly $8.2 trillion to the debt in the next decade… Perhaps Rubio knows what spending he’d cut to offset that massive revenue loss. If so, he ought to tell us.”
Tax refunds: Too easy to collect? The Wall Street Journal’s Richard Rubin considers (paywall) the implications of a new study from Jacob Mortensen and Andrew Whitten from the Joint Committee on Taxation. “Software and shady tax preparers make it incredibly easy to fiddle with the numbers until you hit the sweet spot that shows the maximum refund.”
Case in point: Maryland. State Comptroller Peter Franchot has stopped accepting returns from 37 private tax preparers, citing a pattern of questionable returns from outfits in low-income neighborhoods. When they file fraudulent returns, taxpayers are on the hook for the preparers’ misdeeds.
Meanwhile, Congress bans Internet taxes. Yesterday the Senate followed the House and voted to ban permanently state and local taxation of Internet access. The measure does not address the related issue of when states can require online retailers to collect sales taxes on their transactions. However, Senate leaders promised to allow a vote on that matter later this spring.
And an oil tax will slip through the President’s fingers. House Ways & Means Chair Kevin Brady let Treasury Secretary Jack Lew know that President Obama’s $10 per barrel oil tax has “no chance” in Congress. The fact that Brady is from Texas probably didn’t help the proposal. The price of crude, meanwhile, continues to drop.
February 15 is President's Day. The Daily Deduction will return Tuesday, February 16.
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