Can President-elect Biden chart a new course for America’s fiscal future? In their new TPC brief, Erald Kolasi and Gene Steuerle analyze how the pandemic has changed—for the worse—the federal government’s budget outlook. Its unsustainable course, they write, “creates huge obstacles….Without major reform, programs aimed at investing in workers, children, and the young will garner ever-declining shares of government resources as spending on health, Social Security, and interest on the debt continue to swamp everything in their path.”
Massachusetts’ cities and businesses ponder pot revenues. Cities are receiving their shares of the state’s marijuana taxes, some for the first time, as the industry begins its third year of legal existence. Westfield Mayor Donald Humason and other local officials are cautiously eying new revenue from the state’s growing and changing cannabis industry: He is budgeting those projected revenues very carefully.
The IRS says Prince’s estate is worth twice its executors’ estimate. Prince died in 2016 without a will. In one of the largest and most complicated probate proceedings in Minnesota history, the IRS alleges that executors undervalued the artist’s estate by about $80 million. Thus, the IRS wants an additional $32.4 million in federal taxes plus a $6.4 million “accuracy-related penalty” for the low-ball estimate.
Digital tax showdown. The US has threatened to impose new 25-percent tariffs on $1.3 billion in French products starting tomorrow in response to the digital tax France imposed on big US tech companies at the end of 2020. Spain’s version of the digital tax is scheduled to take effect in two weeks and the OECD is due to meet on the subject on Jan. 14-15. Before Trump leaves office, the US Trade Representative is likely to issue its report on 10 investigations into unilateral digital taxes.
“Oh what a tangled web we weave, when first we practice to [leave.]” Post-Brexit, some specialty retailers in the European Union are facing higher costs and increased paperwork to comply with tax authorities in the United Kingdom. One bicycle parts firm and an online beer retailer will no longer ship to the UK. Meanwhile, shipping companies like FedEx say they’ll increase charges to cover the costs of adjusting to Brexit’s changes to the VAT (Value Added Tax) that the UK now collects at the point of sale, rather than at the border.
Trump re-nominates Judy Shelton for a Fed post. With just 15 days left in office, President Trump has once again asked the Senate to confirm Judy Shelton to fill a seat on the Federal Reserve Board. The GOP-controlled Senate failed to confirm her last year and is scheduled to meet for only a day or two before President-elect Joe Biden is sworn in.
The Daily Deduction will resume its regular schedule after Inauguration Day. Until then, it will post on January 11 and January 19.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at firstname.lastname@example.org.
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, 2020.