Ireland and Apple, Inc., think they can overturn Apple’s $14.5 billion back tax bill. Apple CEO Tim Cook is confident that his company can successfully appeal the European Union’s decision, and Ireland plans to support him. The EU’s finance chief, Jeroen Dijsselbloem, says Cook doesn’t understand the company’s moral obligation to pay its fair share. Meanwhile, TPC’s Howard Gleckman wonders whether the kerfuffle could “help open the door to a consensus business tax reform plan. After all, if those firms are going to have to pay taxes somewhere, perhaps they’d prefer paying in the US.”
And taxes will go up for some New Jersey and Pennsylvania residents in 2017. GOP Governor Chris Christie will end the decades-old pact between New Jersey and Pennsylvania that allows those who work across their state borders to pay income taxes where they live. New Jersey could gain $180 million in tax revenue from Pennsylvania residents who work in the Garden State. Meanwhile, 100,000 Jersey residents who earn less than $110,000 a year in Pennsylvania will owe an average of about $1,000 more in Keystone State income taxes.
Expecting a tax refund next year? Be patient. The IRS will implement new anti-fraud measures next year. The changes will give the agency more time to detect fraudulent returns and keep refunds out of scammers’ hands, but they’ll also delay refunds for households that file early and claim the earned income tax credit or the additional child tax credit will be affected. The IRS suggests those families should still file early, but warns they won't see their refunds until after February 15.
Mike Pence says he’ll release his tax returns “shortly.” The GOP vice-presidential candidate promised in a Meet the Press interview to join Hillary Clinton and Tim Kaine in making his returns public as soon as this week. But Pence had nothing to add about Donald Trump’s returns, which he said Trump won’t disclose until an IRS audit is complete.
In case you missed them on TaxVox… TPC’s Len Burman explains how Donald Trump’s tax proposals could “double our trade deficit from $500 billion to as much as $1 trillion at current income levels.” As for online sales taxation, Howard Gleckman doesn’t think that House Judiciary Committee Chairman Bob Goodlatte’s proposal is a good solution.
For a take on Libertarian presidential nominee Gary Johnson’s tax plan… Bloomberg’s Ramesh Ponnuru considers the candidate’s 28 percent federal sales tax as a replacement for the federal income, payroll, and corporate taxes. He argues that the plan would be expensive and unfair, hitting seniors especially hard, and would boost the underground economy as consumers try to avoid the levy.
Don’t forget to register for the upcoming TPC event on dynamic scoring of Trump’s and Clinton’s tax proposals. TPC and the Penn Wharton Budget Model will jointly analyze how the candidates’ proposed changes would affect the economy and federal tax revenues, using a state-of-the-art dynamic economic model. Register here for the September 16 event. You’ll hear from experts who will discuss each candidate’s proposal, explore the sensitivity of estimates to many necessary assumptions, and suggest ways to improve future modeling.
On the Hill… Tax Analysts reports that September should be a busy month for the House Way & Means Committee. The panel has three full committee markups tentatively scheduled for September 8, 14, and 21. There may also be “full committee tax events" on September 22 and 29, but details are not yet available. Meanwhile, GOP leaders plan a House vote on a bill to exclude from taxable income Olympic cash awards and medals.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.