Thinking through the pesky details of a destination-based cash flow tax. TPC’s Howard Gleckman outlines five of the biggest technical challenges supporters will have to address if Congress is going to enact the House GOP’s controversial business tax plan. Meanwhile, General Motors’ Chief Financial Officer Chuck Stevens says his company is working on a comprehensive plan with the President. It would be an alternative to the House’s border adjustable tax. The Wall Street Journal explains how (paywall) border issues make the hard work of tax reform even more difficult for the GOP.
Brush up on tax reform issues with TPC. A series of new briefs lays out key issues facing lawmakers as tax reform takes a turn on the national agenda. Learn about the standard deduction and personal exemption here, and about capital gains here.
A new Democrat joins the Ways & Means Committee. Judy Chu of California is replacing Xavier Becerra, who resigned his House seat to become California's attorney general.
Kansas lawmakers aren’t in Kansas anymore. The state’s Republican-led Senate has a plan to raise personal income tax rates and repeal GOP Governor Sam Brownback’s 2012 tax cut for business owners. But the Governor, who asked the legislature to balance the state’s budget, said the plan “punishes the middle class — teachers, police officers and nurses — working hard to provide for their families and serve their communities.” Kansas faces a $320 million shortfall in the current fiscal year, and projects a $582.6 million deficit for 2018.
About Ohio Governor John Kasich’s tax reform plan… Cleveland.com produced a calculator for Ohioans to determine how their tax bills would change under Kasich’s proposal. The GOP governor would cut income taxes but raise taxes on sales, tobacco, and cable services. Most households would benefit from the income tax reductions, but the lowest income families would be net losers after taking into account taxes on consumption. Higher income households would benefit the most.
Will Switzerland change its corporate tax breaks? On February 12, Swiss voters will decide whether to accept a government plan to replace tax breaks for multinational companies. A “no” vote would require the government to figure out how to keep companies from relocating out of Switzerland while still complying with tax rules set by the Organization for Economic Cooperation and Development.
India’s overrun with cash and can barely track it for taxes. Last fall, in an effort to reduce tax avoidance in his cash-happy country of 1.3 billion people, Prime Minister Narendra Modi gave Indians until December 30 to deposit or exchange their 500-rupee and 1,000-rupee bills. They’ve done it and now officials are scrambling to sift through records of millions of new bank deposits. The Wall Street Journal (paywall) reports that India’s tax agency does not have the resources to review all the flagged deposits. In the past, India audited just 1.5 percent of the 40 million tax returns that were filed annually.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.