GOP vice presidential nominee says he’ll release his tax returns. Indiana Governor Mike Pence says he’ll release his tax returns “soon.” He told WABC that “When my tax returns are released it's going to be a quick read…The Pences have not become more wealthy as a result of sixteen years in public service.” Democratic vice presidential nominee Tim Kaine released tax returns for the years 2006 through 2015 on Friday. Kaine and his wife Anne Holton have had effective federal income tax rates ranging from 13.4 percent to 24 percent.
Also a bit boring: Democratic presidential nominee Hillary Clinton’s 2015 tax return. TPC’s Len Burman took a look at her 2015 return. For folks as wealthy as the Clinton’s are (earning $10.2 million in 2015), their tax returns are boring, as if designed for intense scrutiny. Their overall effective income tax rate is 31 percent. Including self-employment taxes, it’s 34 percent. The Clintons donated 10.2 percent of their income—$1,042,000—to charity, $1 million of which went to the Clinton Family Foundation.
GOP nominee Donald Trump meanwhile, wants parents to deduct childcare expenses. The problem is, notes TPC’s Elaine Maag, “tax subsidies aren’t generally the best way to help low-income households pay for childcare. Families typically have to pay their childcare bill weekly or monthly. A tax subsidy for childcare that comes at tax time… is likely too late to be much help for needy families. [Trump’s] proposal would do little or nothing to help them.”
Federal taxes are (still) progressive. TPC’s Bob Williams shares updated TPC estimates. “Effective federal tax rates this year will range from 3.5 percent for households in the lowest-income quintile (or fifth) to 33.0 percent for those in the top 1 percent.”
TPC’s Tax Line provides details about itemized deductions. TPC’s Chenxi Lu offers updated data showing how many taxpayers itemize, and how the number has changed in recent years. Tax Line is a new monthly series on the data behind current tax policy debates.
Will Washington state voters support a carbon tax in November? A statewide ballot initiative, I-732, would levy a carbon tax of $15 a ton on coal, natural gas, and oil-based fuels. The tax would take effect next year and would gradually increase to $100 per ton by midcentury. Drivers would end up paying about 15 cents more per gallon of gas next year, rising to $1 more per gallon by 2059. I-732 offers a tax swap: The carbon tax would provide revenue neutrality by cutting the state’s 6.5 percent sales tax by 1 percentage point, offering tax credits to 400,000 low-income households, and cutting business and occupation taxes. The state’s Democratic party and environmental groups don’t like that, and would rather price carbon in order to generate new revenue for clean energy investment and pollution reduction in low-income communities.
Tax fraud fears don’t fade. The IRS and states are preparing for fraudulent tax filings next year after a series of high profile thefts of personal information by online hackers. The IRS says it caught and prevented $24 billion in fraudulent claims in 2013. In June, the IRS said it had stopped $1.1 billion in fake returns through the first quarter of 2016.
Indonesia has a plan to fund infrastructure and finance its deficit. The nation has tax amnesty program that could bring back up to $43 billion in funds held overseas, a plan that Bank Indonesia says could generate $4 billion in revenue. Indonesia is now considering ways to set up tax haven jurisdictions on the islands of Bintan and Rempan, where Indonesian and foreign businesses could set up shell companies and enjoy lower tax bills.
Congress is in recess. The Daily Deduction will post Mondays until Congress returns.
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