“You don’t believe me….” The President praises the economic benefits of TCJA tax cuts. He spoke at a campaign-like event in Ohio yesterday, noting that people’s taxes “are going way down” and US “factories are coming back.” In other news, the Dow Jones Industrial Average closed yesterday down 1,100 points, following a 666 point drop on Friday. The plunge wiped out all market gains since Trump signed the Tax Cuts and Jobs Act on December 22.
“There’s a kind of magic to be had….” Did the president and Congress ‘give’ us a tax cut? TPC’s Gene Steuerle explains why the answer is no. What they’re really doing is “transferring public resources to some of us from others. In aggregate and over time, we must pay for anything they claim to give…. Government can—and should—shift resources in ways it believes will provide a future return to society. But that is different from saying that the money is free, like a gift from Santa.”
“Don’t sell it short for truth.” At least gig workers will enjoy a TCJA boon. The new tax law allows Uber or Lyft drivers to deduct 20 percent of pass-through income before applying a new lower individual income tax rate. Intuit, maker of TurboTax, estimates that by 2020 about 7.6 million people will be working in the gig economy, up from 3.2 million in 2015.
“There’s a kind of freedom to be had…” Amazon makes a deal with French tax authorities. The French government asked for $252 million in unpaid taxes from the online retail giant, based on sales that it says should have been booked in France but were instead booked in Luxembourg. There’s no word on what the settlement is, but Amazon may have agreed to pay less than $252 million.
“I should have known by now.” If you use one, renew your ITIN. The IRS reminds taxpayers with expired Individual Taxpayer Identification Numbers (ITINs) to renew them as soon as possible to avoid processing delays or loss of key tax benefits. An ITIN is used by those, such as many immigrants, who have tax-filing or payment obligations under US tax law but are not eligible for a Social Security number. The number expires if not used at least once in the past three years.
“You don’t understand it, I can tell by your smile.” The President will nominate tax attorney Charles Rettig to lead the IRS. Should the Senate confirm his nomination, he’ll be the first IRS Commissioner in several years to be a career tax expert. His law practice has focused on defending taxpayers in conflicts with the IRS. The past four IRS commissioners have been experienced managers of large-scale operations rather than tax lawyers.
“I’ve always said today is like tomorrow.” The Treasury Department estimates it will cost $397 million for the IRS to implement the TCJA, including $291 million for IT costs. But the White House has asked Congress to add only about $90 million to the next short-term government funding bill.
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