Senate Finance Committee Chair Orrin Hatch says he’ll propose a corporate integration plan within weeks. At a Finance panel hearing yesterday, he cited benefits of allowing corporations to deduct dividends while taxing corporate payouts at the shareholder level. Hatch and others believe this would keep firms from moving to lower tax jurisdictions. However, TPC’s Steven Rosenthal testified that three-quarters of corporate shares are held in tax-free accounts or by foreign investors and thus are not taxed twice. And TPC’s Howard Gleckman described how those findings might change the debate over corporate reform. Stay tuned.
Mitch McConnell, Donald Trump, and Tradition. No, it isn’t a revival of Fiddler on the Roof, but the Senate GOP leader told reporters yesterday that his party’s presumptive presidential nominee is bucking tradition by not releasing his tax returns. No word if he was heard humming, "If I were a rich man….”
Michigan tax revenues are falling. The state’s Senate and House fiscal agencies agreed to reduce revenue projections by $173.9 million for this fiscal year and by $159.2 million for next year. Income tax collections are rising, but corporate tax collections are down and sales tax revenues have been flat.
New York City hotel occupancy and sales tax revenues are also sagging. The Independent Budget Office finds that hotel occupancy tax revenues fell 4 percent from October through March, and sales tax revenues fell 1.3 percent for the first three quarters fiscal year 2016. The IBO blames a combination of factors, but apartment-sharing websites like Airbnb may be partially responsible.
Australian backlash against a “backpacker tax.” The Australian government planned to tax tourists on working visas at a 32.5 percent rate beginning July 1. But the tourism and farming industries that rely heavily on temporary workers lobbied against the tax, arguing they’d lose workers to New Zealand or Canada. After the government announced the plan, working holiday visa applications fell by 5 percent. Now, the government says it will delay the tax.
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