Over There, Over There… Advocates for US citizens living abroad are pushing to repeal the Foreign Account Tax Compliance Act. Congress passed FATCA in 2010 to prevent offshore tax evasion. And some GOP conservatives, including House Freedom Caucus Chair Mark Meadows and Sen. Rand Paul want the Trump Administration to repeal the law administratively. FATCA requires financial institutions in other countries to report most US citizens’ account information to US authorities. Opponents say the law requires information without probable cause of wrongdoing, and creates too great a paperwork burden and risk of penalties.
More GOP critics of the DBCFT surface. The House GOP leadership has struggled to win support for its destination-based cash flow tax. Now, a new focus of opposition has surfaced—farmers. But their problem isn’’t with the the DB-part, it is with the CFT. Republican lawmakers representing highly-leveraged agriculture interests told the House Agriculture Committee that barring the deductibility of interest—a key piece of the cash flow tax--is a non-starter.
They won’t give up on Trump (releasing his tax returns). House Democrats are trying another way to see the President’s tax returns. They’ve started a “discharge petition” on a bill that would require Trump and future presidential nominees and presidents to disclose their returns. If a majority of House members sign, the bill would go straight to the House floor for a vote. But given the partisan divide in the chamber, the likelihood of this happening is, well, small.
And they won’t give up on firing John Koskinen. A majority of House Ways & Means Republicans, including chair Kevin Brady, have asked President Trump to fire IRS commissioner John Koskinen. His term expires next November. Interestingly, eight of the panel’s 23 Republicans did not sign the letter.
What’s up with the ACA penalty tax? TPC’s Bob Williams reminds filers about the, umm, confusing state of the Affordable Care Act penalty for not having insurance. The IRS, directed by the White House, will accept returns that fail to comply with the ACA provisions. But Bob says taxpayers aren’t off the hook: They might not have to report, but if they owe a penalty, they still must pay. Get it?
The soda tax hits a sour note. A Pennsylvania appeals court heard oral arguments yesterday in a beverage industry lawsuit to block Philadelphia’s tax on sugary drinks. The American Beverage Association and other plaintiffs want to invalidate the tax which, they argue, conflicts with the state’s sales tax. In Seattle, merchants are protesting their mayor’s plan for tax on soda.
How TPC conducts dynamic analysis of tax plans. Ben Page and Kent Smetters offer an overview of TPC’s methodology. Short-term analysis relies on a Keynesian model, which assumes tax policy can influence the economy by changing the demand for goods and services. Long-term analyses rely on two models, a neoclassical growth model and the Penn Wharton Budget Model. Both reflect how taxes can affect incentives to work, save, and invest. They also illustrate the effects of budgetary policies on interest rates and investment decisions. TPC used the methodology to analyze Trump’s campaign tax plan and the House GOP tax blueprint.
Understanding the tax code and perceptions of fairness. The second annual Lubick Symposium starts tomorrow at 9:00 am. TPC’s Vanessa Williamson will present new research on how information about tax laws change American taxpayers’ perceptions of fairness and discuss her recent book on American attitudes toward the tax system. A panel of public opinion experts will discuss how those attitudes may affect the debate over a big 2017 tax bill. You can register to view the live webcast here.
Getting to know you… getting to know (at least something) about you… The Tax Hound thinks learning a little more about the tax policy could—maybe—make a taxpayer’s tax filing experience a little less maddening.
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