Can Congress contain Mega Roth IRAs? Top Senate Finance Committee Democrat Ron Wyden has drafted a bill to encourage retirement savings while curbing tax avoidance through “Mega Roth IRAs.” He’d make the "savers credit" refundable, let those 70 ½ and older contribute to traditional IRAs, and allow employers to contribute to 401(k)s of employees who are paying off student loans and can't afford to contribute to their retirement plans. It would also bar new contributions to Roth IRAs with balances that exceed $5 million, and require withdrawals of current amounts over that cap.
And next week on the Hill…The House Small Business Committee will hold a hearing next Wednesday entitled, “IRS Puts Small Businesses through Audit Wringer.” It probably won’t hear much about wide-spread tax avoidance among these firms.
In the United Kingdom, a call for more transparency. The opposition Labour Party says large companies should publish their tax returns. It also wants parliamentary committees to see all taxpayer’s returns in an effort to curb tax avoidance and evasion.
As for transparent charitable giving… GOP presidential nominee Donald Trump says he made a “mistake” when his foundation made a $25,000 political contribution to Florida’s attorney general, who was considering whether to begin a fraud case against Trump University. Trump paid a 10 percent tax penalty and reimbursed the foundation, but The Wall Street Journal reports (paywall) that Trump may owe more. Former director of the IRS’ exempt organizations office, Marcus Owens, suggests that Trump should pay another 10 percent excise tax for using the foundation’s money to cover a personal expense.
Oregon voters are split on a corporate tax hike, for now. A November ballot measure calls for out-of-state corporations and those with $25 million or more in revenue to pay a new 2.5 percent gross receipts tax. The revenue would boost Oregon’s general fund by nearly a third, or $3 billion a year. The state says the money would support education, health care, and senior services, but the legislature would not be bound to specific uses. Will Bernie Sanders’ supporters rally to get the measure passed, or will Republican calls for “centrism” win out?
Michigan nears a medical marijuana tax. The state Senate just approved a bill to require an operating license to grow, process, sell, transport, or test medical marijuana. Provisioning centers that sell the drug would pay a 3 percent tax on their gross retail income. The state House approved the bill last year and may vote again in the coming week. Michigan voters approved the sale of medical marijuana in 2008.
Will Florida cut taxes one more time? The state’s three-year outlook indicates a surplus of only $7.5 million for the 2017 fiscal year and a budget gap of $1.3 billion during GOP Governor Rick Scott’s final year of office. Scott nonetheless wants more tax cuts, while the Senate president—also a Republican—would boost spending on state universities and other programs instead. This sets the stage for a budget showdown when the legislature returns in the spring.
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