The partial federal government shutdown may last a while. President Trump and Congress could not agree on the White House demand for $5 billion for a border wall, so many government agencies, including Treasury and the IRS, shut down at midnight Friday after their temporary funding ran out. Congress will not return to address the issue before Thursday at the earliest and new White House chief of staff Mick Mulvaney said yesterday it was “very possible” the impasse would continue into next year.
Meanwhile: The President is musing about firing Fed Chair Jerome Powell. Trump has been asking if he can, legally. Treasury Secretary Steven Mnuchin tweets that Trump says “increasing of interest rates… is an absolute terrible thing to do.…” However Mnuchin and Mulvaney also said over the weekend that the president knows he cannot fire Powell just because Trump disagrees with the Fed’s monetary policy.
As for corporate investment and the TCJA… The Wall Street Journal reviews (paywall) the results of the Tax Cuts and Jobs Act on capital spending. It finds the effects are modest at best one year after enactment. “People want clear victory laps or resounding defeats and you’ve got neither,” said Republican economist Doug Holtz-Eakin. “You’ve got things that are better—but not uniformly great—and that can be frustrating.”
Moving on. The GOP will continue to control the Senate next year but Chuck Grassley is replacing the retiring Orrin Hatch as Chair of the Finance Committee, and that means more staff turnover. Jennifer Acuña, who became chief tax counsel earlier this year, is leaving. So is chief oversight counsel Chris Armstrong.
What do President Nixon’s tax troubles portend for President Trump? Politico’s Brian Faler looks at how President Nixon’s taxes became public. House Democrats want to see Trump’s tax returns once they take control of the House, and seem to have the legal power to do so. But will they be able to release them for all Americans to see? If history is any guide, it will not be easy. For starters: When accused of underpaying his taxes, Nixon voluntarily provided his tax returns to the Joint Committee on Taxation. Trump has volunteered… nothing.
Congress is in recess, and the federal government is partially closed. The Daily Deduction will post Mondays until January 7. Happy Holidays.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at email@example.com. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
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.