Will The TCJA create permanent 3 percent growth? Not according to most members of the National Association of Business Economics. The group’s newly released survey reports that about 60 percent of members believe the Tax Cuts and Jobs Act will add 0.5 percent or less to the 2018 growth rate and only 6 percent think it will boost the growth rate by more than 1 percent. Only about one-quarter felt the tax cuts would increase real GDP by more than 1 percent by 2027.
Major shipping company CEO: US tariffs will hurt the US more than the rest of the world. Bloomberg reports that Soren Skou, CEO of Maersk, the world’s biggest shipping company, says the fallout from a trade war “could easily end up being bigger in the US.” He thinks tariffs could slow global annual trade growth by 0.1 to 0.3 percent, but the effect in the US could be “perhaps 3 or 4 percent.”
Facebook and Coca-Cola may have to settle for larger tax bills. Now that a federal appeals court has sent Medtronic and the IRS back to US Tax Court to determine Medtronic’s tax bill, other companies may have a harder time defending their own planning strategies. Facebook and Coca-Cola have employed aggressive transfer pricing where they pay high prices for intellectual property that is owned by a business unit in a low-tax jurisdiction. It may be easier for these companies to agree to pay a larger tax bill rather than appeal IRS tax assessments.
Will Californians decide to repeal parts of Proposition 13? They may face a choice at the ballot box in November, 2020. The Daily Intelligencer reports on the property tax limitation enacted by the state 40 years ago. Writes Ed Kilgore of efforts to repeal parts of it: “It will likely split the political world right down the middle, with huge stakes for commercial property owners and the state and local governments (and particularly the schools) that rely on property taxes.”
Will St. Paul, Minnesota levy a new local sales tax for preschool? City, school, and nonprofit leaders are crafting a plan to offer free or subsidized universal preschool to the city’s three- and four-year-olds. St. Paul voters may decide in 2020 whether to approve a half- or full-cent sales tax to pay for it. Should they do so, the legislature would then need to approve the levy. St. Paul would be the first city in Minnesota to pay for citywide preschool.
Study: Not all Australians would benefit from nation’s corporate tax cuts. Is the plan doomed? The Australia Institute has analyzed data from the Department of Finance and finds that voters in some states won’t see much benefit from Prime Minister Malcom Turnbull’s plan to cut corporate tax rates from 30 percent to 25 percent. Only 11 percent of the companies that would benefit from the tax cut are based in the states of Queensland, Tasmania, or South Australia, where voters are key to Turnbull’s reelection hopes. His administration likely will let the tax proposal die in the Senate before the election.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at firstname.lastname@example.org. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
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, 2016.