Joe Biden proposes a new tax regime for multinational corporations. The Democratic presidential nominee outlined a package of tax incentives aimed at encouraging US manufacturing. He’d impose a 10% surtax on overseas profits of US companies on goods sold in the US, as well as a 21 percent minimum tax on all foreign earnings of US-based firms. Biden also would create a 10 percent tax credit for companies that make domestic investments.
Economists: K-, not V-shaped recovery. The consensus among economists is that a steep rise in economic growth will not follow the steep drop the economy experienced in the spring. Rather, they expect a slower recovery as well as a long-term widening between the haves—whose gains will continue to climb—and the have-nots—whose prospects will fall. Federal Reserve Chairman Jerome Powell told NPR, “Without question, [the pandemic] has exacerbated really preexisting disparities in our economy that were already troubling.”
No pandemic relief bill? Increasingly, Senate GOP leaders are saying they believe Congress will pass no additional economic stimulus. Majority Leader Mitch McConnell is struggling to win his own party’s support for his latest $500 billion plan. Democrats have rejected the idea out-of-hand and the White House has been remarkably quiet about it. The House passed a $3 trillion bill nearly four months ago.
Hard numbers on the TCJA’s pass-through deduction. TaxNotes columnist Marty Sullivan reports that in 2018 nearly 19 million tax filers claimed about $150 billion in the special qualified business income deduction under section 199A of the Tax Cuts and Jobs Act. Using new IRS data, Marty reports the average deduction was about $8,000. But those with adjusted gross income (AGI) below $200,000 claimed an average of about $3,000, those with between $200,000 and $1 million claimed an average of $15,000. Those with AGI greater than $1 million took an average deduction of more than $157,000.
Tax revenues in West Virginia stay in the black. August tax collections totaled $331.4 million, 12 percent higher than budget office projections. But compared to August 2019, last month’s collections are down by $4.75 million. Governor Jim Justice says that tax revenues are attributable to a strong economy and not federal coronavirus relief.
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