House passes revamped NAFTA, temporary SALT repeal. The House passed a revamp of the North American Free Trade Agreement yesterday, after the White House agreed to numerous revisions. The Senate plans to take up the legislation next year. The House also passed a temporary repeal of the cap on state and local tax deductions enacted under the Tax Cuts and Jobs Act. The measure will not pass in the Senate, nonetheless the President Trump indicated he would veto it.
Senate passes spending deal for President Trump’s signature. The Senate passed the $1.4 trillion spending deal passed by the House earlier this week; upon the President’s signature, the government will be funded for fiscal year 2020.
Mountain View, California, gears up for its “head tax” to help fund public services. Starting January 1, the city will phase in over three years a new per-employee tax on employers with 50 or more employees. Those employers will pay the one-third of the new tax, based on total number of employees, in 2020, two-thirds in 2021, and the full tax in 2022. An employer’s tax per employee climbs as the total number of employees climb. For example a grocery store having 63 employees will pay up to $75 per employee, while a large storage company with 1,150 employees will pay up to $100 per employee. Google, with 23,000 employees, will eventually pay $3.5 million annually. Small businesses with less than $5,000 in annual revenue are exempt from the tax.
Will China’s purchase of $200 billion in US goods cover the cost of the trade war? Bloomberg Economics considers the math, noting that estimates of the trade war’s impact on US gross domestic product ranges from 0.3 percent to 0.7 percent in 2019. In 2019 dollar terms, Bloomberg Economics estimates the cost to US GDP has already hit $134 billion and will rise to $316 billion by the end of 2020.
To cure Rhode Island budget woes, tax increases are no sure thing. Democratic House Speaker Nicholas Mattiello disagrees with Democratic Governor Gina Raimondo. The speaker has ruled out tax increases to address Rhode Island’s $180 million to $200 million budget deficit. Said Mattiello: “I am not sure that we have a revenue problem… We have a lot of management issues in government. We have executive problems…. Government has to be run more efficiently.”
United Kingdom’s Prime Minister Boris Johnson promises a tax break for small businesses. Johnson plans to cut business tax rates for 500,000 small businesses in the UK. The tax cut would be worth as much as $16,037 per business, according to The Daily Mail.
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