Treasury backs off some anti-inversion rules. Treasury issued new regulations yesterday that scaled back, but did not repeal, a set of Obama-era regulations aimed at blocking tax-motivated mergers between US and foreign firms.
Senate fails to take a key step to a 2020 spending bill. Senate Republicans could not round up the 60 voted they needed to proceed on a four-bill spending package for the departments of Defense, Labor, Health and Human Services, Education, and State. Democrats refused to support the effort, in part because of the ongoing dispute over funding a border wall with Mexico.
Another tax cut from the White House? The goal: Amplify the contrast between President Trump, who’d cut more taxes, and Democratic presidential candidates, who largely want to raise taxes—though mostly on the wealthy and corporations. Trump economic adviser Larry Kudlow and Rep. Kevin Brady are talking up the idea. Some ideas: making permanent the tax cuts enacted under the Tax Cuts and Jobs Act but due to expire after 2025, cutting payroll taxes or indexing capital gains to inflation. But as The Washington Post reports, “Trump has spoken both in favor of those ideas and in opposition to them, sometimes changing course in a matter of days, making it hard to ascertain the White House’s approach.
Grassley may step down as Finance Committee in 2021. Maybe there won’t be a big new tax bill. Finance Chair Chuck Grassley has put out the word that he’d rather chair the Judiciary Committee. Grassley would return to the position he held from 2015 to 2019. Judiciary panel chair Lindsey Graham says he’d step down in deference to Grassley, who has more seniority. This assumes the GOP maintains control of the Senate.
After lawmakers raise questions, Treasury and IRS propose Opportunity Zone data collection. They released a draft form that the IRS could use to collect information about zone investments. The TCJA gave investors in these areas a capital gains tax break.
A wealth tax will encourage the wealthy to spend… and make more political donations. TPC’s Howard Gleckman explains why wealth taxes proposed by senators Bernie Sanders and Elizabeth Warren may have unintended consequences: Backers say the idea is to reduce political influence of the mega-rich but a wealth tax may do just the opposite. He concludes that it might be better for everybody if the ultra-wealthy just buy more yachts.
In two weeks… “Taxing Capital Income: Mark-to-Market and Other Approaches. Increasing taxes on capital income—highly skewed toward the wealthy—offers alternative ways to address inequality through the tax system. But design and implementation are not easy. On Friday, November 15, join TPC for a keynote address by Rep. Jan Schakowsky (D-IL) and two panels that will tackle the issue. Register here to attend or watch its live webcast here.
Illinois legislature passes Local Government Revenue Recapture Act. Tax Notes reports (paywall) that the measure would allow local governments to hire third-party auditors to make sure the state Department of Revenue correctly distributes sales tax revenue to localities. But the measure also raise privacy concerns, since private third parties would have access to confidential taxpayer information.
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