More gridlock. Treasury Secretary Steven Mnuchin has refused a request from the chairman of the House Ways and Means Committee to testify on the effects of the government shutdown on the economy and on the upcoming tax filing season. Panel chair Richard Neal said the administration offered to send lower level IRS officials instead. Such a refusal is highly unusual. It would have been Mnuchin's first appearance before the panel since Democrats took control of the House.
Tax Court is closed for the duration. It cancelled 13 trials set for late January and early February due to the government shutdown. It is still possible to file petitions and other documents to the court electronically.
Trade talks continue between the US and China. The Associated Press reports that US and Chinese trade envoys will meet this month in Washington. The talks may help put off, for now, the ongoing trade war between the two countries. US Trade Representative Robert Lighthizer invited Vice Premier Liu He to discuss suspending additional tariffs on each other’s goods for 90 days while negotiations between the two countries continue.
Don’t restore the “sick tax,” say Minnesota GOP legislators. Several House Republicans asked Governor Tim Walz and the DFL (Democratic) legislative majority to allow a 2 percent tax on most patient services to expire on January 1, 2020. Extending the tax would increase health care costs by $600 million in 2020. Walz called ending the tax a “nonstarter” since the state needs the revenue. Minnesota currently carries a $1.5 billion budget surplus, about half of which comes from carryover funds from the current two-year fiscal cycle.
Washington Democratic Governor Jay Inslee wants to hike taxes. He wants to raise a tax on service industry gross receipts from 1.5 percent to 2.5 percent.. He’d also levy a capital gains tax on the sale of stocks, bonds, and other assets and make the 1.28 percent real estate excise tax more progressive. That levy would drop to 0.75 percent on home sales under $250,000, stay at 1.28 percent for sales between $250,000 and $1 million, but increase to 2 percent for sales between $1 million and $5 million and to 2.5 percent for sales greater than $5 million.
Nebraska lawmakers may consider exempting feminine hygiene products from sales tax. LB 170 would make Nebraska the eleventh state to exempt feminine hygiene products from taxes. Nationally, consumers spend $275 million on menstrual hygiene products. WOWT 6 News reports on consumers who says it’s not about the money, but the principle. But maybe it should be about the money.
January 29 at TPC: How Are States Responding to the TCJA? TPC, the American Tax Policy Institute, Tulane University, and the University of Tennessee host a conference to examine state responses to the 2017 tax cut. Topics will include conformity of state and federal individual and business tax bases, international business as a source of state revenue, and state workarounds to the TCJA’s limit on the deduction for state and local income taxes. Register here for the day-long event. The event will be webcast here beginning at 9:30 am.
In observance of Martin Luther King Jr. Day, the Daily Deduction will resume its regular schedule on Tuesday, January 22.
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