Shutting down the government comes at a price. A new report from the Senate Permanent Investigations Subcommittee concludes the last three government shutdowns cost taxpayers $4 billion. Much of the cost came from paying federal workers for time that they were barred from working. At least $338 million went to costs directly associated with the shutdowns such as extra administrative work, lost revenue, and late fees on interest payments. The estimate excludes some of the biggest government agencies, including the departments of defense and agriculture. For what it’s worth: Congress remains no closer to a fiscal 2020 spending deal. A potential shutdown on September 30 is 12 days away.
Senate Appropriators give the IRS a Spending Bump: The Senate appropriations subcommittee agreed to boost IRS funding to almost $11.4 billion for fiscal year 2020, up about $200 million from this year. About $200 million of the increase will be earmarked for enforcement. In June, the House Appropriations Committee approved giving the agency $12 billion, an increase of $700 million from the previous year.
“Trump’s tax reform happened. Now what?” The American Enterprise Institute is hosting a blog series on the Tax Cuts and Jobs Act from September 16 through October 28. It kicked off Monday with a piece by AEI’s Aparna Mathur that encourages patience when assessing the impact of the TCJA on the economy. Today the series features a post by Harvard’s Jason Furman, a top economic adviser to President Barack Obama.
Connecticut Governor Ned Lamont will try to narrow a state sales tax hike on pizza and bagels before it goes into effect. The state’s sales tax is set to rise from 6.35 percent to 7.35 percent on October 1. The Department of Revenue Services says the language in the newly passed budget significantly broadens the kinds of meals and beverages covered by the sales tax. They now include single-serve ice cream bars, sealed bags of lettuce, doughnuts, bagels, and pizza slices. Lamont says his budget office has begun working with revenue department to narrow the range of items that would be subject to the tax hike.
The Netherlands tries to reform business taxes. Current tax law allows wealthy multinational companies to reduce the tax they pay on their profits. The proposed reform, which still needs to be passed by parliament, would limit these benefits and generate $292 million in new income.
India’s GST panel may not cut taxes on car-related components. The Indian government’s goods and services tax panel has reviewed a government study that shows that annual revenue loss could be $6.95 billion if the panel reduces tax rates for the auto sector from 28 percent to 18 percent.
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