The President’s tax plan: Taking shape or shape shifting? OMB Director Mick Mulvaney told the Senate Budget Committee yesterday that the President’s tax proposal would be revenue-neutral on a static basis, contrary to earlier statements that economic growth would pay for tax cuts. Meanwhile Treasury Secretary Steven Mnuchin told the Senate Finance Committee that the administration wants a middle-class tax cut that would retain the interest deduction from business income and accelerated depreciation of capital—paid for in part with economic growth. Top committee Democrat Ron Wyden quipped, “At the rate we’re going, we’re going to have a full proposal [in] something like 2075."
Vice President Pence lobbies for the Trump tax plan on the Hill. It’s not going over very well. CNN reports that Pence asked Republican Study Committee chair Mark Walker (R-NC) to poll members on whether they would break with Speaker Ryan and support the President’s tax plan over the speaker’s plan. In what’s become a near constant refrain this year, members disagreed over which plan to support.
Paying for the border wall: Here’s one (unfair) way to do it. GOP Rep. Mike Rogers of Alabama proposes a 2 percent tax on all person-to-person wire transfers to Mexico and the rest of Latin America and the Caribbean. Notably, the tax would apply only to personal transfers. Businesses that move money abroad to say, the Cayman Islands, would be exempt.
Speaking of unfair: An Illinois tax bill may be unconstitutional. Illinois continues to try to pass a budget, but its tax package has a problem. The general counsel of the state’s Department of Revenue says that the bill would be discriminatory in three ways: its proposed service taxes would treat similar services unequally; it would impose a 1 percent tax on transactions made through electronic commerce (video streaming) but not on similar transactions made in-person (renting a video at a brick-and-mortar store); and it would levy a 5 percent tax on satellite TV providers but not on cable TV providers.
Snatching defeat from the jaws of victory. The 45 states that have sales taxes estimate that they lose an aggregate $26 billion annually because of sales taxes not collected for online sales. Pew Charitable Trusts reviews their dilemma and their continuing legislative efforts to collect those taxes.
Congress will be in recess next week. The Daily Deduction will observe Memorial Day and post Tuesday, May 30. It will return to its regular schedule upon Congress’ return.
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