Who likes a carbon tax? A group of former senior Republican policy advisers and business executives, including former Treasury secretaries James Baker, Henry Paulson, and George Shultz, and top White House economic advisers Marty Feldstein and Greg Mankiw like one (full disclosure: Greg is a member of TPC’s advisory board). In a paper released yesterday, they proposed replacing carbon regulation with a gradually increasing carbon tax starting at $40-a-ton. The tax would be adjusted at the border. Revenue would be rebated quarterly to households through the Social Security Administration.
With friends like these… Two-time Republican presidential candidate and chairman and editor in chief of Forbes Media, Steve Forbes, calls the House Republican border adjustment proposal to tax imports “insane.” He told CNBC’s Squawk Box, “Washington politicians are becoming currency swap traders and experts. It's preposterous… people forget in Washington we have these elaborate global supply chains. You're going to disrupt all of that and you don't know what the consequences are.” Wonder what he really thinks?
Maybe there is a way to see the President’s tax returns. George Yin, a former chief of staff of the congressional Joint Committee on Taxation, writes that Congress already has authority to obtain and disclose the president’s tax returns. In an op-ed for The Washington Post, Yin says that Congress has had the authority since 1924. CNNMoney fleshes out the story here. The chance of this happening in the current environment seems… remote.
First Mexico, now Canada. Politico reports that the Canadian Foreign Minister Chrystia Freeland wrapped up a two-day visit to Washington by warning that her country is prepared to retaliate against any border tax. In January, Mexican officials had the same response. While Freedland said she’d await details of any US plan before outlining a specific response, she said, “Canada would respond appropriately.”
In Alabama, Governor Bentley wants to nix the sales tax on groceries. In his state of the state address this week, he said, “I want to remove the state tax on food. Every family in Alabama should be able to find a good job and feed their families without being overly taxed.” Alabama is one of four states that taxes groceries.
And in Connecticut, the future of the state’s sales tax remains uncertain. Governor Dannel Malloy does not plan to propose a sales tax increase, and a $1.7 billion budget hole is getting harder and harder to fill. The 6.35 percent levy might have a little room to grow, according to some, since neighboring New York has an 8.88 percent sales tax.
Do taxpayers change behavior based on capital gains’ tax rates? Yes, yes, they do—at least when it comes to timing gains, or selling assets. Authors Timothy Dowd of the Joint Committee on Taxation and TPC’s Robert McClelland model taxpayer decisions with a unique data set of capital asset sales. They find strong evidence that taxpayers realize fewer gains in the weeks prior to reduction in tax rates. High income taxpayers are more responsive than others and that taxpayers reduce their tax liability by pairing gains and losses.
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