House Ways & Means teases Tax Cut 2.0. The tax panel released a three one-page summaries of what will be in the next tax bill when it is finally proposed next week. It would make permanent the Tax Cuts and Jobs Act’s individual income tax cuts, enhance various tax-favored savings accounts, and create new tax breaks for start-up businesses. The summary is silent on the fate of the cap on the state and local tax (SALT) deduction. Politico reports the committee will mark up the bill next Thursday.
Will the House really vote on the bill this month? Bloomberg reports that Speaker Paul Ryan’s support for a quick vote means that House leaders think a vote before the mid-terms will do GOP members more good than harm. GOP leaders seem willing to leave Republican lawmakers in New York, New Jersey, and other high-tax states stuck between a rock and hard place: Do they support the SALT cap or vote against tax cuts backed by their party?
A Senate vote on Rettig next week? Senate Majority Leader Mitch McConnell took the first steps to break a Democratic filibuster on the nomination of Charles Rettig to be IRS commissioner. The move sets up a possible vote next week.
More from McConnell: We want the wall, but not until after the midterms. McConnell says he plans to send nine money bills to President Trump before the fiscal year ends on September 30. None will include funding for Trump’s border wall, an issue McConnell thinks is best considered after the mid-terms. McConnell told Fox Newsthat he expects that 90 percent of the budget will be approved before the spending bill deadline. However, lawmakers still would need to approve a short-term patch to fund the Department of Homeland Security. The President sometimes insists that he’ll shut down the government if he doesn’t get his wall, but McConnell doesn’t seem worried.
Coalition of Businesses: President Trump, don’t impose tariffs on more Chinese goods. The National Retail Federation and 150 organizations that represent manufacturers, farmers, technology and natural gas companies made the plea in a letter to US Trade Representative Robert Lighthizer, reports The Hill. Should President Trump proceed with tariffs on an additional $200 billion in Chinese imports, they warn, the US economy will suffer widespread damage.
Most Americans pay very little individual income tax on capital income. TPC’s Gene Steuerle and colleagues have a new study that demonstrates why. “Most capital income earned never is taxed at the individual level, in part because assets are often not sold and their gains never subject to income tax, in part because capital income benefits from a long list of tax preferences, and in part because of outright evasion…. For “$1 million of wealth, the annual amount of taxable dividends, interest, capital gains, and other returns is less than $20,000.”
Save September 25: Capitol Hill Policy Briefing on the EITC. The Earned Income Tax Credit helps nearly 26 million working Americans keep more of their income, lifting nearly 6 million people – including 3 million children – out of poverty and improving financial stability for millions more. How might Congress expand the program? In the event hosted by Tax Credits for Working Families, policymakers, researchers and advocates will discuss the impact of proposed legislation and learn about new findings on the EITC’s effectiveness. Click here to learn more and register.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at email@example.com. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2016.