Restarting the tariff wars. Just days before Chinese negotiators arrive in Washington to continue trade talks, President Trump tweeted a new threat to increase tariffs on $200 billion in Chinese goods on Friday and impose levies on hundreds of billions of dollars of additional imports “shortly.” Last month, Trump rattled the trade sword by vowing to raise import taxes on European products such as wine and cheese.
Does House Ways & Means Chairman Neal need a reason to see the president’s tax returns? In an essay for Politico, University of Virginia law professor and former Joint Committee on Taxation chief of staff George Yin argues that Neal may not, based on 26 USC 6103(f)(1)). “If Congress wants to get those returns, its next move should be to sue [Treasury Secretary Steven] Mnuchin based on his failure to comply with the 1924 law, rather than to seek the information through a subpoena. At worst, a court will require Neal to have a legitimate legislative purpose—the same condition that applies to enforce a subpoena. But a court might well decide, based on the language and history of the 1924 law, that no purpose is needed at all. Congress has a strong case.”
California’s Senate advances a presidential tax return bill. The bill would require presidential candidates to submit five years of tax returns to appear on the state’s ballot. Eighteen other states are considering similar measures. It is not clear whether Democratic Governor Gavin Newsom will sign the measure, even if the House agrees to it. His spokesperson said the bill “would be evaluated on its own merits." Former governor Jerry Brown vetoed a similar measure in 2017, saying it was unconstitutional.
Michigan’s budget and tax fights over infrastructure and education may last a while. Governor Gretchen Whitmer wants to boost state aid to education. But if she uses general fund revenue for schools, she won't have resources to fund roads--which currently are financed with income taxes. So, she's also proposing a 45-cent-per-gallon motor fuels tax hike, an idea opposed by Republican legislators. Talks are likely to continue right up to the end of the fiscal year next Sept. 30.
More Democrats want an investigation into not-so-Free File practices. A long list of presidential candidates, including senators Elizabeth Warren, Cory Booker, and Bernie Sanders and Rep. Tim Ryan, all demanded the Federal Trade Commission investigate tax software firms for “ hiding Free File from search engine results — and therefore from consumers — in order to artificially inflate profits and deprive low-income consumers of a cheaper product.” Separately, Democratic lawmakers want the IRS to "dismiss the companies that have deliberately tried to cheat taxpayers from the program." The IRS has established a senior leadership team to look into the issue.
The great shrinking infrastructure plan. Last week, President Trump and Hill Democrats said they agreed to pull together a $2 trillion package. By Saturday, Trump was tweeting that he is “looking hard” at a plan worth between $1 trillion and $2 trillion. No indication that he is giving the same close attention to paying for the effort.
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