Who in the Trump Administration do you really talk to about taxes? We got a clue yesterday, when The Washington Post reported that House Speaker Paul Ryan would meet last night with Reince Priebus, Stephen Bannon, Jared Kushner, Stephen Miller, and Gary Cohn to talk tax strategy.
Oklahoma! Where the fuel tax may finally climb? The state’s gasoline and diesel levies, currently at 17 and 14 cents per gallon respectively, haven’t been raised since 1987. The state’s $870 million budget gap may change that. Some GOP lawmakers say proposals to increase the fuel taxes are likely in the new legislative session in February. Oklahoma’s constitution requires 76 House votes for any tax increase, which could make passage difficult.
Texas’ business franchise tax lives to see more revenue generating days. Governing explains how. A recent court case brought by the owner of AMC movie theaters could have expanded the definition of “non-taxable cost of goods sold.” Had the definition changed, Texas could have been required to pay out $6 billion in tax refunds and would have lost $1.5 billion annually in franchise tax revenues.
What’s the best way to measure state revenue capacity? TPC’s John Iselin considers three general measures of revenue capacity: Gross State Product, Personal Income, and Total Taxable Resources. “Each measure has only limited value in explaining why one tax or fee might be preferred over another.” That’s why policymakers are well served to use both the State and Local Finance Initiative’s calculations on state-level revenue capacity for each major revenue source, as well as economy-wide metrics.
Dow Chemical won’t get over $1 billion in partnership-related tax deductions after all. The US Supreme Court will not hear the chemical company’s argument that it deserves tax benefits from two partnerships it created. Dow argued that one partnership should have been able to deduct royalty costs associated with 73 Dow patents. It claimed that another partnership should have been able to depreciate a chemical plant. The high court let stand lower courts’ rulings that Dow owed a 20 percent penalty for negligence and substantial understatement of taxes.
Some of us will see our taxes go up this year. In 2015 and 2016, the Social Security payroll tax applied only to the first $118,500 of earnings. In 2017, that threshold climbs to $127,200. About 12 million workers will pay the 6.2 percent levy on the additional $8,700 in income, or about $539 more by year’s end.
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