Ready for the Democratic National Convention? Democrats come together in Philadelphia this week to nominate Hillary Clinton as their 2016 presidential candidate. Throughout the political hype and rhetoric, TaxVox will continue to do its best to keep taxes on your mind. The Daily Deduction will post only today, but TaxVox will be running daily posts on Clinton’s tax agenda. If you missed last week’s posts on Donald Trump’s tax agenda, you can check them out here.
Would Trump pull out of the WTO over tariffs? He’s already said he’d change the terms of the NATO Alliance and reverse regional trade agreements such as NAFTA, but yesterday GOP presidential nominee stepped up his isolationist rhetoric by threatening to pull out of the World Trade Organization, which he called “a disaster.” His remarks came after NBC’s Chuck Todd asked Trump whether his proposals to impose big new tariffs on China and Mexico would pass muster with the trade organization. If they won’t, Trump insisted, “Then we're going to renegotiate or we're going to pull out.” The problem, of course, is the WTO is the very venue the US has used to block unfair Chinese trade practices.
International tax reform…from 30,000 feet. At a recent TPC conference to discuss two new corporate tax reform plans, Columbia University law professor Mike Graetz provided some valuable context. As TPC’s Howard Gleckman said, “Graetz did the rest of us a great service by providing an easily understandable 30,000-foot overview of the challenges of international tax.”
Senate Finance Committee’s top Democrat names a new tax team. Senator Ron Wyden chose Victor Fleischer to be co-chief tax counsel with current senior tax counsel Tiffany Smith. The team will start working together October 11. Fleischer is a tax professor at the University of San Diego Law School and an expert in financial taxes who has long argued last year that carried interest be barred or at least be disclosed on tax forms and to private equity investors.
More transparency about corporate tax rates, thanks to a new auditing rule. The Financial Accounting Standards board issued a new rule on stock option accounting, reports The New York Times. The rule goes into effect in March 2017, and will present a truer picture of a company’s financial position. Said one tax accounting expert: “These companies were not paying taxes on account of option exercises, but the financial statements made it look like they were. Companies’ tax rates were overstated, and there can’t be any defense for that.”
New Jersey Democrats have a gas tax deal for Governor Christie. The state’s Democratic legislative leaders have veto-proof support for a plan that would raise the state’s gasoline tax by 23 cents a gallon. Revenue would help fund transportation projects and other tax cuts. The plan would also phase out the estate tax, boost a tax credit for low-income workers, raise the retirement and pension tax exemption, and create a new tax break for veterans. Motorists who earn $100,000 or less would receive a $500 tax deduction to offset lessen the pocketbook impact of the gas tax hike.
Congress is recess. The Daily Deduction will post Mondays until it resumes.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.