Tuesday dinner at the White House… President Trump hosted a bipartisan group of lawmakers for dinner last night to discuss tax reform and other issues. Still absent: A detailed tax plan.
But a 15 percent business rate may be off the menu. Treasury Secretary Steven Mnuchin acknowledged yesterday that a 15 percent business tax rate—favored by the president—may not be doable. He also said that any rate cut for pass-through businesses would exclude, somehow, service companies. Tax cuts that are retroactive to the first of this year would be a boon to the economy, he said. The final rate doesn’t matter, he concluded, because “this is a pass-fail exercise. Passing tax reform, which hasn’t been done in 31 years, that’s a win.”
Are targeted audits for low-income households a “win,” too? Some Republican lawmakers would require the IRS to perform a “mini-audit” on every American applying for the earned-income tax credit.
How many fiscal cliffs are too many? Senate Majority Leader Mitch McConnell said there’d be no new debt-ceiling increase until well into 2018. He said the three-month extension Congress passed this month will allow Treasury to take its usual “extraordinary measures” to continue borrowing until March. But Senate Minority Leader Chuck Schumer retorted, “If they used extraordinary measures to extend the debt ceiling, there would be two cliffs instead of one," one of which would fall right around mid-term election season.
An extra tax credit for young children. TPC’s Elaine Maag and the Urban Institute’s Julia Issacs have designed a Young Child Tax Credit—an additional $1,000 for children aged 5 or younger in low- and moderate-income families. Elaine explains that families with young children earn less than those with older kids but often have higher child care expenses. The credit would be worth an extra $18 billion.
A new boss for the House Budget Committee. Politico reports that third-term congressman Steve Womack (R-AK) will replace Diane Black as the panel chair. Black, who has struggled to put together a budget for the coming year, is expected to step down later this month to run for governor of Tennessee.
And a new international tax appointment at Treasury. Chip Harter has been named Assistant Treasury Secretary for International Affairs. His portfolio will include international aspects of the coming tax bill. Harter has spent most of the past two decades working in PwC’s national tax office.
The Senate Finance Committee has questions for Equifax… The credit monitoring giant is a critical partner of the Internal Revenue Service and other federal agencies. Chairman Orrin Hatch and the panel’s top Democrat Ron Wyden demanded that Equifax respond to a reported data breach that exposed Social Security numbers, birthdates, addresses, and driver’s license numbers of approximately 143 million Americans.
While another Senator thinks somebody should go to jail… Senator Heidi Heitkamp of North Dakota, a Democrat on the Senate Banking Committee, wants a criminal investigation of Equifax executives who reportedly sold $2 million in stock after the company learned of the data breach but before the firm made it public. “If that happened, somebody needs to go to jail,” she argued. “It’s a problem when people can act with impunity with no consequences. How is that not insider trading?”
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- © Urban Institute, Brookings Institution, and individual authors, 2016.