Trump wouldn’t say what tax brackets he prefers. He needs to. TPC’s Howard Gleckman says that President Trump’s recent tax outline endorsed three individual tax rates—10-25-35 percent--without ever attaching tax brackets to those rates. And without knowing the brackets, lawmakers and voters can’t know how Trump’s tax plan would affect taxpayers, or how much revenue they’d lose. To show the differences, TPC modeled two alternative bracket structures. The effects are very different.
Treasury invites you to take a look under the hood. Or at least, to check out a new spending tracker. “The new site provides taxpayers with the ability to track nearly $4 trillion in government spending from Washington, DC, directly into their communities and cities,” said Treasury Secretary Steven Mnuchin. The 2014 Digital Accountability Act mandated the development of the website, Beta.USAspending.gov.
Company relocations: What’s love (and state tax breaks) got to do with it? TPC’s Megan Randall examines the tax incentives awarded by Boston and Massachusetts to entice General Electric to move its headquarters from Fairfield, Connecticut, to Boston last year. It is not easy to evaluate and compare outcomes of the deals states offer to companies since each location, firm, and negotiation is unique. Still, “the only way states can navigate these tricky negotiations is to gather as much information as possible,” explains Megan. The Urban Institute’s State and Local Finance Initiative (SLFI) has pulled together some tools to help states understand the trade-offs associated with economic development efforts.
Louisiana’s Ways & Means Committee moves ahead on tax changes. The tax writing panel approved changes to the state’s corporate and individual income taxes. Under current law, the first $12,500 of individual income is taxed at 2 percent, rising to 6 percent on income over $50,000. Under the proposal, income of less than $12,500 would be exempt from income tax. All other income would be subject to a 4 percent rate. The proposal also would eliminate the corporate franchise tax and set a flat corporate income tax rate of 6 percent.
In California, no country for women and babies. A proposal to eliminate sales tax on tampons and diapers and increase taxes on hard liquor failed this week. In 2016, Democratic Governor Jerry Brown vetoed the sales tax changes, saying the state could not afford the revenue loss. The addition of an alcohol tax hike did not receive the required a two-thirds supermajority in the state legislature.
How have home mortgage subsidies driven inequality? The New York Times takes a close look at the mortgage interest deduction, which disproportionately benefits higher-income households. “When we think of entitlement programs, Social Security and Medicare immediately come to mind. But by any fair standard, the holy trinity of United States social policy should also include the mortgage-interest deduction — an enormous benefit that has also become politically untouchable.”
Whose afraid of the big bad gas tax? Wired offers its take on how the federal gasoline tax, not changed from its 18.4 cent-per-gallon rate since 1993, has become “America’s bogeyman:… It appears grounded in the simplest of realities, but symbolizes the hyper-partisan political climate that makes it hard for Washington to do almost anything.”
Alabama: Maybe not so scared? The state currently has an 18-cent-per-gallon tax on gasoline, and House Speaker Mac McCutcheon declared a gas tax increase dead last month. But some organizations and state officials hold out hope that a bill sponsored by Rep. Bill Poole could revive the issue in the spring legislative session. The measure would increase the tax on gas and diesel fuel by 4 cents a gallon on Sept. 1, and another 2 cents a gallon in 2019, and allows for an option to increase it an additional 3 cents a gallon in 2024. Revenue would support a $2.45 billion bond issue for road and bridge upgrades.
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