Another tweet, another tax policy? President-elect Donald Trump promised a “big border tax” on General Motors if GM continues to manufacture some Chevrolet Cruze cars in Mexico and sell them in the United States. GM began producing one model of the Cruze in Mexico last year, assembling 52,631 cars mostly for the world market. Of those, 4,500 were sold in the US. The firm built 319,536 other Cruze vehicles in the US in 2016. Ford Motors took notice of the tweet, too.
“Border adjustability” could mean big problems for big oil… or not. Tax reform in 2017 could mean that export revenues end up exempt from tax while import revenues are taxed. That could be bad news for US oil refiners: They import about half the crude oil used to make gasoline. But the oil industry has a strong presence inside the Beltway. “I don't see this mix of leadership figures in the House, Senate and the White House, doing something that has the effect of raising gasoline prices," said energy analyst Peter Cohn.
Senate Minority Leader Chuck Schumer: Infrastructure spending is great, but who pays? The Senator from New York says the Democrats are willing to work with the President-elect on his infrastructure plan, but Trump’s proposed tax credits for private investors won’t be enough to fund it. “We have thousands of bridges, tunnels, highways, schools, wastewater systems and airports in need of repairs… We need significant, direct spending,” Schumer said. “How does the president-elect plan to get that done?”
Cassidy Joins Senate Finance Committee. Louisiana Republican Bill Cassidy will replace Dan Coats on the panel. Cassidy, a physician, also serves on the Joint Economic Committee.
That new Philadelphia beverage tax has a bite. The tax on sweetened beverages went into effect on New Year’s Day. One vending machine featured a sign noting that it will now cost $2.00 instead of $1.50 to release a bottle, thanks to the tax. So far, some consumers are irritated, while others think the money will be put to good use. But will they find another way to quench their thirst?
And Michigan drivers started paying more for gasoline this week. New Year’s Day brought a higher state gas tax to pumps in Michigan. The levy climbed from 19 cents per gallon to 26.3 cents. The state’s diesel tax climbed from 15 cents per gallon to 26.3 cents. The increases reflect the state’s first fuel tax hike in 20 years. The statewide average daily gas price increased by about 3 cents per gallon from last week.
Tax Notes has named TPC’s Lily Batchelder as one of its people of year. Lily, who is a professor at NYU’s School of Law and a former Democratic tax counsel at the Senate Finance Committee and a tax adviser to President Obama, is a visiting scholar at TPC. She shared the award with, among others, tax lawyer Michael L. Schler of Cravath, Swaine & Moore, a member of TPC’s Leadership Council. The overall winner was President-elect Trump.
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