We’ll have to wait a little longer for a Senate Finance Committee vote on Mnuchin. Democrats walked out of the room yesterday, leaving the panel without a quorum and unable to vote on Steven Mnuchin’s nomination as Treasury Secretary and Tom Price’s selection as Health and Human Services Secretary. The Democrats say both gave misleading testimony about past financial practices and insist they’ll block a vote until they get more information. Committee chairman Orrin Hatch called his Democratic colleagues “idiots.”
If he is confirmed, Mnuchin will respect JCT scoring. Politico reports that, in written answers to committee questions, the Treasury Secretary-designate promised that won’t lean on the Joint Committee for a favorable score on any tax bill. “If confirmed, I will respect the independence of the Joint Committee on Taxation and refrain from exerting pressure on them and their chosen model of scoring," Mnuchin wrote. Of course, JCT could still get heat from its bosses in Congress.
Can President Trump make Mexico pay for the border wall? TPC’s Donald Marron says no. He explains why neither a destination-based cash flow tax (DBCFT) nor a tariff (a “big border tax”) will force Mexico to pay. In a nutshell: Congress has other plans for DBCFT revenue, namely to pay for cutting business taxes. And a tariff on Mexico would mean that American consumers and businesses would pay for Trump’s wall through higher prices. According to Katheryn Russ, formerly of the Obama Administration’s Council of Economic Advisers, Americans could pay an average of $1,000 a year more for purchased goods.
You think you’ve got problems? Apple is a little late in paying its tax bill. The tech giant must repay $13.9 billion in illegal tax benefits to Ireland, but it’s missed the deadline. EU Competition Commissioner Margrethe Vestager seems understanding: “It's a tricky thing to do because it's a large sum so, of course, you have to figure out how to do that.”
In Oklahoma, one lawmaker would restore EITC refundability. Last year, the state made the Earned Income Tax Credit non-refundable for about 355,000 low-income state residents, aiming to increase tax revenue by $29 million in 2017. Oklahoma faces an $870 million shortfall, but State Representative George E. Young, Sr., wants the EITC to be refundable again, noting the plight of over 5,000 families in his district. “Why this burden should be placed on the people of my district- where the very benefit of this credit has been doing the most good- is beyond any sensible reasoning,” Young said.
In case you missed it: A brief on what the IRS does and how to reform it. TPC’s Eric Toder lays it all out, and concludes that while the IRS is a complex and unwieldy bureaucracy that can’t easily become a modern hi-tech organization, it’s still possible to improve tax administration. Congress could simplify tax laws, restore adequate funding, and allow more flexibility in personnel management. The IRS itself should improve information technology, too—starting with measures to attract the best IT talent, such as offering better pay.
Welcome aboard, Mark Mazur! TPC’s new Robert C. Pozen Director, Mark Mazur, starts today. He brings 25 years of broad experience to TPC ranks, having just served as the Assistant Secretary for Tax Policy at Treasury. He’s also worked at the IRS, the Department of Energy, the Joint Committee on Taxation, the President’s Council of Economic Advisors, and the National Economic Council.
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