GOP tax cuts that are paid for? TPC’s Howard Gleckman explains how the American Health Care Act would finance all those tax cuts. By cutting Medicaid by $880 billion and reducing insurance subsidies by $680 billion, the AHCA would fund $883 billion in tax cuts over the next decade—mostly for high-income households—as well as some additional health-related spending. And it would reduce the projected federal debt by $337 billion through 2026.
OMB’s Mulvaney defends AHCA’s tax cuts. Trump budget director Mick Mulvaney told MSNBC yesterday that objections to the bill’s tax reductions are overblown: "Who cares if somebody else benefits? Why do you have to have a system that punishes somebody to help somebody else? Why would it be bad if folks benefited from a small tax deduction at the same time?" TPC estimates that the plan would cut taxes for those in the top 1 percent by an average of $37,000.
But maybe the bill is about to get a makeover. Mulvaney and White House press secretary Sean Spicer said the administration and House Republican leaders may be rewriting the plan. They would not say what will change but they are facing growing pressure from Republicans in the House and Senate to fix the bill.
Revealed: Trump’s 2005 tax return. Journalist David Cay Johnston received a copy of Donald Trump’s 2005 Form 1040 by US mail. The return indicates that Trump and his wife paid $38 million in taxes on about $150 million of income. The return was released by MSNBC's Rachel Maddow and the income and tax payment were confirmed by the White House. The White House said Maddow's release of the return was "desperate" and "totally illegal."
California lawmakers have a teacher retention strategy. A state Senate bill would exempt from state income tax teachers with five years of experience. The cost of this measure is still undetermined.
In Iowa, some GOP lawmakers back a “neutral” sales tax hike for water quality. A dozen House Republicans back a bill that would raise state sales tax to fund the Natural Resources and Outdoor Trust Fund. Why? The proposed 0.38 cent sales tax increase over three years would be offset by about $60 million in annual income tax cuts.
In Tennessee, a gas tax hike advances. The Senate’s transportation committee approved a measure to raise the state’s 21.4 cent per gallon gasoline tax by 4 cents in the upcoming fiscal year, and by 1 cent in each of the following two years. The measure also would cut the state’s 5 percent tax on groceries to 4 percent and repeal a rental car fee.
Would a tax on robots help workers? TPC’s Yifan Zhang considers Microsoft founder and billionaire philanthropist Bill Gates’ recent call to tax the use of robots. His goal would be to slow the spread of automation and strengthen the social safety net for displaced workers. But does it make sense to fundamentally change the way the US taxes business investment? And does the use of robots really decrease overall human employment?
Tax reform flies into friendly skies. Boeing and about 90 other aerospace companies are weighing in on the policy debate. In a letter to congressional leaders, they urge the enactment of “legislation that modernizes our tax system, allows America's businesses to better compete in the global marketplace and encourages job creation and innovation in the United States.” But what do they think about a border adjustable tax?
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.