Senator Sanders has a plan to “Stop BEZOS.” The Independent from Vermont introduced a bill yesterday entitled the Stop Bad Employers by Zeroing Out Subsidies Act. It would require firms that employ at least 500 people a year to pay a 100 percent tax on government benefits received by employees who work full-time, part-time, or as independent contractors. Problem is: The bill would discourage firms such as Amazon and Walmart from hiring low-skilled US workers and encourage the businesses to shift production overseas or replace low-wage workers with robots.
The TCJA increases the share of households that pay no federal income tax. TPC’s updated tax tables show that the percentage of households paying no federal income tax is going up by 2 percentage points to 44 percent—thanks to the Tax Cuts and Jobs Act. Of course, nearly all those households still pay payroll taxes and state taxes. TPC’s Philip Stallworth and Dan Berger explain here.
What happens to the cost of borrowing when you add SALT? Moody’s Investors Services says Treasury’s efforts to block high-income taxpayers from working around the TCJA’s cap on state and local tax deductions is a “credit negative” for states like Connecticut, California, New Jersey and New York. Writes Moody’s analysts: The SALT cap “will likely dampen housing price growth in high-tax states and states with a high percentage of SALT filers by removing an incentive for homeownership.” The possible result could be lower bond ratings.
Should funding public schools be so complex and uncertain? The Tax Hound takes a look at the taxes states levy to pay for public schools. The role of property taxes, for example, has changed over the years. What role will other state and local taxes play?
People are living longer. How might Social Security adapt? TPC’s Gene Steuerle and the Urban Institute’s Damir Cosic outline the implications of three ways Social Security could respond to longer lives: It could leave things as they are, keep constant the expected number of retirement years, or keep constant the relative share of life in retirement. Their research shows that adjusting Social Security retirement ages as people live longer would significantly improve trust fund balances in the long run, with modest effects in the short run.
Is the US winning the trade war? So far, no. The trade deficit grew for the second consecutive month in July. The jump is the biggest since March 2015 with record imports, reports The Hill. Exports dropped 1 percent to $211.1 billion. The decline was lead by soybeans (down l$682 million) and civilian aircraft (off by $1.57 billion). Imports grew by 0.9 percent to $261.2 billion thanks in part to increased purchases of computers, oil, and autos.
The IRS says payments under state or local tax credit programs may be deductible as business expenses. Firms that make business-related payments to charities or government entities for which the taxpayers receive state or local tax credits can generally deduct the payments as business expenses, the Internal Revenue Service said today.
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