President-elect Trump: Not divesting, not releasing. Yesterday, Trump gave his first press conference since winning the election. He will transfer his business assets into a trust run by his two sons and will not divest himself from his businesses, but to avoid the appearance of conflict of interest, he will give hotel profits generated by foreign government payments to the US Treasury. Asked about releasing his tax returns in order to prove that he has no financial ties to Russia, he stated again that he would not be releasing his tax returns “as they’re under audit” and Americans “don’t care at all.”
How might delaying ACA’s “repeal and replace” affect tax reform? Says TPC’s Howard Gleckman, “Replacing the ACA will be hard, and it will have inevitable consequences for the rest of the Trump agenda including—or perhaps especially—for a 2017 tax bill.” He outlines four ways a delay could hinder tax reform efforts.
Time is on one man’s side. The Wall Street Journal reports (paywall) that President-elect Donald Trump’s nominee for Secretary of State, Rex Tillerson, plans to defer the taxes owed on his $170 million retirement package from Exxon. Tillerson retired in December and could owe $70 million in taxes immediately. But by Exxon’s design, the trust holding his retirement funds will follow a deferred compensation schedule. To defer owed taxes, Tillerson will argue that he could someday violate the trust’s noncompete agreement in the future and forfeit his money. Columbia Law School’s Robert Jackson calls it “one of the most aggressive and least successful tax positions executives have taken over the past two decades.”
The World Bank says Trump’s tax cuts could help the global economy… or not. In its latest update to its global economic outlook, the World Bank posits that Trumps’ tax cuts and spending plans could boost the US economy. Those changes could improve economies around the world, but trade polices remain a black box. Given the uncertainty, the World Bank will not change its forecasts for US growth for 2017 and 2018, setting them at 2.2 percent and 2.1 percent respectively.
Tune in tomorrow if you can’t be there in person: Are entrepreneurs overtaxed? As lawmakers focus on tax reform, does America’s tax system treat entrepreneurs appropriately? Could reforms improve economic performance? The Tax Policy Center’s noontime event tomorrow will examine types of entrepreneurial income and explore how the US can and should tax them. You can stream the event live here.
Stay tuned for hearings soon on Mnuchin and Price. Senate Finance Committee Chair Orrin Hatch would like hearings for Treasury Secretary nominee Steven Mnuchin and Health and Human Services Secretary nominee Tom Price before Trump’s January 20 inauguration. The panel received three years of tax returns from both nominees.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.