The IRS improves service but remains under-funded. The Wall Street Journal reports (paywall) that the IRS answered 73 percent of its toll-free calls in the first week of March. That’s more than twice the rate as last year. Average time on hold fell from 21 minutes to nine. But the IRS continues to cut back on audits, and identity theft persists. In December, Congress gave the budget-strapped agency $290 million to improve cybersecurity and customer service, and reduce identity theft.
Two TPC events are on deck. This Thursday, find out what federal tax reform would mean for the states. The event will be webcast here. On April 13, explore the four most interesting tax ideas from the campaign trail.
In case you missed them… TPC’s Howard Gleckman considers Speaker Paul Ryan’s thoughts on tax distribution, and illustrates the historic gulf between presidential candidate tax plans. TPCs’ Donald Marron reviews the United Kingdom’s plan to build a better soda tax.
JCT adds up the tax changes in President Obama’s budget. The Joint Committee on Taxation estimates the president’s 2017 fiscal plan would raise taxes by a net $2.1 trillion over 10 years. On the individual side, the biggest revenue raiser is his proposed cap on the value of itemized deductions and other tax breaks, worth $542 billion. Tax hikes on US based multinationals would bring in more than $600 billion. Congress will enact none of these ideas before the president leaves office.
Will tax cuts in Nebraska bust the state budget? The Lincoln-based OpenSky Policy Institute says yes. Its analysis suggests that a trio of education and property tax reforms, combined with 214 bills that Nebraska lawmaker have approved or will soon approve, could result in a $240 million budget shortfall over the next three years. Nebraska’s legislature will debate the tax reforms this week.
Florida Governor Rick Scott chalks up at least one tax victory. Florida lawmakers didn’t approve most of his tax-cutting plans, but they overwhelmingly supported one idea: a call to permanently exempt manufacturers from paying the state sales tax on industrial machinery and equipment. Scott says the $73 million annual tax break would boost manufacturing in the state. Last year, manufacturing employment rose by 12,200 to 350,000, about 4 percent of its non-agriculture workforce.
Batman vs. Superman vs. Michigan. The latest superhero movie received $35 million in state tax credits for filming in Michigan. The state chapter of Americans For Prosperity lobbied against the tax break, and Michigan lawmakers eventually killed the film credits. The Wall Street Journal reports (paywall) the group’s efforts helped eliminate or reduce tax breaks for entertainment productions in several states. AFP calls the credits “government cronyism.” Politics aside, the credits don’t do much to boost state economies.
Congress will be in recess until April 4. The Daily Deduction will publish Mondays until Congress reconvenes.
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