White House: No tax hikes on the wealthy, “clean” debt ceiling increase. In a small briefing with reporters, OMB Director Mick Mulvaney declared dead a proposal to increase tax rates on the wealthy, an idea floated by White House adviser Steve Bannon. Mulvaney also expressed his and the entire administration’s support for a “clean” debt ceiling increase—with no spending cuts.
A gender-neutral tax code? Senate Democrats introduced a bill that would remove all gender-specific references from the Internal Revenue code. The legislation follows the 2015 Supreme Court ruling that legalized same-sex marriage and 2016 Treasury guidance that allows same-sex married couples to file joint federal tax returns.
Marco Rubio wants to boost the child tax credit. In an op-ed for a conservative website Breitbart, the Florida GOP senator proposes boosting the $1,000 child tax credit to $2,500 per qualifying child. The credit would apply to both income and payroll taxes. The idea comes from a proposal he co-sponsored with Senator Mike Lee (R-UT). Rubio would pay for the credits by closing tax loopholes for the wealthy and “special interests,” and by assuring only US citizens and legal residents get tax benefits.
How might we give middle-class workers a raise? Saying it’s time to consider big ideas, TPC’s Len Burman proposes a 100 percent refundable tax credit on the first $14,000 of wages funded by a dedicated Value-Added Tax. Under his proposal, he explains that “every worker would get an immediate raise, more than offsetting the VAT for all but high-income people. The credit would boost payroll tax revenues, which would provide a boost to Social Security and Medicare’s finances. The VAT would promote saving and investment and since the revenue would be strictly earmarked to finance the new program, it would not spur additional spending.”
A downside to California’s pot sales: handling all that cash. The state’s emerging marketplace for recreational pot—worth a projected $7 billion—deals strictly in cash, creating a real problem, says the Associated Press. Many banks are averse to the risk of holding money for businesses whose product is still illegal under federal law. That leaves pot sellers bearing the risks of holding lots of cash and having to transport tens of thousands of dollars to local finance departments each month to pay taxes. Both sellers and state agencies fear robbery.
If you like it, you might just pay a tax on it. TPC’s Tax Hound returns to consider Oregon’s bicycle excise tax. Oregon, one of just five states with no sales tax, passed the bike tax last month to help fund trail maintenance and improvement. Some bikers are happy to pay the tax to support their mode of transportation, but others worry it will discourage riders and cut bicycle sales.
Fantasy sports platforms in Arkansas face new “privilege tax.” The state legalized paid fantasy sports games effective July 30 and hit operators with a new tax. DraftKings, FanDuel, and other firms will pay an 8 percent tax on their gross game revenues for the “privilege of conducting those games.” Arkansas requires reporting and remittance by the companies on a quarterly basis. Companies will begin making payments in the state’s fiscal year 2019. The state has no estimate of how much revenue the tax will bring in.
Both the Senate and the House are in recess. The Daily Deduction will post Mondays until their return.
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