Shut-down drama. President Trump handed Democrats a political gift in yesterday’s Oval Office meeting with congressional Democratic leaders Nancy Pelosi and Chuck Schumer. With funding for a chunk of government agencies (including the IRS) due to run out at the end of next week, Trump and Congress remain at an impasse over the president’s border wall. Shut-down politics is always about who is blamed for closing government agencies, which voters see as a sign of failed political leadership. With cameras rolling, Trump took full ownership: “I am proud to shut down the government….I will be the one to shut it down.” Those words will live in many 2020 campaign ads.
Senate confirms Deputy Treasury Secretary Justin Muzinich. In a largely party-line vote of 55 to 44, the Senate yesterday confirmed President Trump’s nominee for the number two position at Treasury, a job that has been vacant since January, 2017. Muzinich has been serving as counselor to Treasury Secretary Steven Mnuchin since 2017.
IRS reminds taxpayers about ABLE accounts. The agency reminds people with disabilities that the Tax Cuts and Jobs Act made major changes to Achieving a Better Life Experience (ABLE) accounts. Eligible individuals may now put more money into their ABLE accounts and roll money into them it from qualified tuition programs (529 plans). Certain contributions made to ABLE accounts by low- and moderate-income people may now qualify for the Saver's Credit. Contributions are not deductible, but distributions, including earnings, are tax-free to the designated beneficiary if used to pay qualified disability expenses.
In Puerto Rico, a lost opportunity? Bloomberg reports on the designation of nearly all of the US territory as an “Opportunity Zone.” Nearly 3,500 square miles of property are eligible for tax-favored investment. Will investors benefit? What about residents of the island? History hints at the likely outcome: An earlier corporate tax break contributed to booming pharmaceutical company investments in Puerto Rico, but when the subsidy phased out in 2006, manufacturers left.
President Macron makes promises. France’s president tries to calm protests in the country’s major cities with tax cuts. In a speech declaring a state of social and economic emergency, he announced that the nation’s minimum wage will increase by $114 a month, effective January 1, 2019. With that, the French government will eliminate a tax on overtime and annual bonuses and rescind a planned tax on pensions below $2,264 a month. All this in response to protests against what began as a tax increase on motor fuels.
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