China responds to the latest US tariff threat. The Chinese government announced Friday that it would put tariffs on $60 billion worth of US imports. Tariffs of up to 25 percent could be applied to over 5,000 US goods, including honey, grated ginger, almonds, maple syrup and liquified natural gas, if the US imposes 25 percent tariffs on $200 billion worth of Chinese imports.
Amazon’s UK tax bill, all told: $2.2 million. The online retailer had a tax bill of £4.6 million pounds ($6 million) in 2017 but paid £1.7 million pounds ($2.2 million). The reduction is due in part to Amazon paying staff in shares, which were counted as deductible costs. Pretax profits were £72.4 million on £1.99 billion in revenue. That’s nearly triple 2016 pre-tax profits of £24.3 million on £1.45 billion in revenue.
The Trump Administration challenges a wine industry tax break. Wine importers can offset taxes owed on imports by getting credit for their exports. But the wine importers may never have paid excise taxes on those imports. The tax break has given the wine industry $50 million annually. Treasury officials say, reports (paywall) the Wall Street Journal, this segment of the wine industry has an unfair advantage over domestic wine producers, and will issue new rules to correct the inequity.
Indexing capital gains could both reduce lock-in and harm the economy. TPCs’ Len Burman considers a question from a reader of a previous post on indexing. The financial advisor asked “Would cutting capital gains taxes, or better yet, eliminating them altogether unlock a flood of capital that could be reinvested in more productive assets, boosting the economy?” In a word, no. Burman explains why.
The IRS won’t refund overpaid “repatriation” taxes on foreign profits. The agency issued a legal memorandum late last week saying that it won’t rebate such overpayments or credit them toward tax bills not tied to repatriations, like annual bills for corporate income. Multinational companies that likely overpaid include those in the pharmaceutical and technology sectors, which have large amounts of profits held overseas. Banks may also be affected.
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