The CBO plans to have its AHCA score in a few weeks. The organization says it will have its updated score of the American Health Care Act during the week of May 22. At least the budget analysts are working: It’s not clear when any legislation—whether health care, tax reform or anything else—will move forward. Senate Democrats may slow legislative activities down in response to President Trump’s firing of FBI Director James Comey.
Kautter to Treasury. President Trump has formally nominated David Kautter to be Assistant Treasury Secretary for Tax Policy. Kautter has had a long career at the audit and consulting firms Ernst & Young and RSM US. He previously was a tax aide to Sen. John Danforth (R-MO). Kautter is likely to play a key role designing a tax proposal for the Administration. He must first be confirmed by the Senate.
What happen to the personal exemption under a Trump tax plan? The Wall Street Journal considers (paywall) the personal exemption from individual income tax. TPC estimates that repealing it—as candidate Trump proposed last year—would generate about $2 trillion for the government over a decade. But the one-page outline Trump released last month was silent about the exemption. Former Obama and Clinton aide Gene Sterling says, “You’re left using a microscope and a calculator to figure out whether middle-class people will get a small tax cut or actually have their taxes increased.” Maybe Treasury Secretary Steven Mnuchin will clarify matters when he talks about the Trump tax plan with members of the G7 this week.
Another pot tax in Nevada to consider. Recreational marijuana sales begin in Nevada in July, and Governor Brian Sandoval has proposed a 10 percent sales tax on recreational pot. It would raise $70 million over two years for public schools. Democratic legislators want to raise the tax to 12 percent, with 10 percent going to schools and 2 percent to substance abuse programs. Both plans would tax medical marijuana growers at 15 percent, up from the current 2 percent.
Kansas lawmakers consider a “tax on a tax.” Lawmakers are discussing a surcharge on personal income taxes to raise money for public schools. The surcharge would be a percentage of a taxpayer’s total tax bill, perhaps tied to the revenue the state expects to collect in a given year. If projected collections fall, the surtax would rise to meet education funding obligations. The Kansas Supreme Court ruled this year that the state’s education funding formula is inadequate, and ordered Kansas to put a new system in place by June 30.
South Carolina’s Governor McMaster vetoes a gas tax. ”Clearly, our roads must have additional funding, but this is not the right or necessary way to get it," McMaster said. The state legislature could to override his veto of the proposed 12-cent increase from the current 16.75-cent-per-gallon rate. That rate has not changed in 20 years.
A Wisconsin GOP tax plan would cut more than $1 billion in taxes… for the wealthy. The state’s Legislative Fiscal Bureau finds that the Assembly’s proposed flat income tax would cut taxes by a net of $2.7 billion by 2029, when it’s fully phased in. More than one-third of the tax cuts, or $1 billion, would go to taxpayers with annual incomes over $300,000.
Massachusetts debates a soda tax. Some lawmakers have proposed a 24 percent tax on a can of soda. The plan could raise $368 million and fund drinking water infrastructure.
Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, email us.
Posts and Comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2016.