CBO: Federal deficit will reach $3 trillion in 2021. Largely because of its response to the coronavirus pandemic, the federal government will spend $6.8 trillion in 2021 and collect $3.8 trillion in revenue. The $3 trillion deficit will be slightly less than last year since US is likely to collect more revenue as the pandemic fades and consumers resume normal activities. It still will be one of the biggest budget imbalances in American history.
Global backing for US-based plan for global corporate taxation. The Organization for Economic Cooperation and Development (OECD) said yesterday that 130 countries and jurisdictions representing 90 percent of global economy are now on board with the broad framework. The plan includes a global minimum corporate tax of at least 15 percent and a provision that the biggest companies pay tax where they generate sales and earn profits. The conceptual agreement still must developed into a detailed plan and approved by individual member nations.
And on July 13, talking international tax reform at TPC. The online conference hosts leading experts to discuss the prospects for an international agreement on base erosion and profit shifting, and how it could interact with Biden’s proposals for US corporate tax reform. The keynote speaker will be OECD director of tax policy and administration Pascal Saint-Amans. Learn more and register here.
Next Thursday, tune in to TPC’s Prescription with Kathleen Quinn. The partner at McDermott Will & Emery will join TPC’s Howard Gleckman to discuss the tax implications of the rapid growth in remote work. Will workers owe income taxes to their state of residence or where their business is located? Learn more and register here for the online July 8 event.
Speaking of work and taxes: Trump Organization charged for 15-year scheme to pay a top executive off the books. The Manhattan district attorney’s office charged former President Donald Trump’s business with fraud and tax crimes related to compensating its chief financial officer, Allen Weisselberg. It also charged Weisselberg with grand larceny, tax fraud, and other charges. Its investigation alleged that he avoided taxes on $1.7 million in income.
US Supreme Court bars California from demanding donor data from non-profits. The 6-3 decision struck down California’s requirement that non-profits raising money in the state turn over federal donor information reports. The state requirement was aimed at political dark money funneled through non-profits. Chief Justice John Roberts, who wrote the majority opinion, called California’s requirement “facially unconstitutional.”
San Jose, CA, to be the first to tax gun owners for cost of gun violence. The city council unanimously passed the first law in the country to require gun owners to carry liability insurance and pay a tax, or fee, to cover costs associated with gun violence. Revenues would pay for police response, ambulance transport, and gunshot-related medical treatment for victims. Once a gun harm study by the Pacific Institute on Research and Evaluation is complete, the city will determine the size of the fee.
Congress will not be in session next week. The Daily Deduction will be published Tuesday, July 6, in observance of Independence Day, and resume its regular schedule on Monday, July 12.
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