Starting to get awkward: Average tax refunds remain lower than last year. The IRS’s latest report shows the average tax refund was $2,640 for the first three weeks of the 2019 tax season, about $500 less than the same time last year. While it remains too early to know if the trend will hold through the tax season, some governors from high-tax states are using the smaller refunds to renew pressure on Congress to remove the cap on state and local tax (SALT) deductions. The awkward refund news also may explain why the IRS weekly report, usually released on Thursday, was delayed until Friday night.
How about encouraging better ways to save than waiting for a refund? TPC’s Howard Gleckman explains that overwithholding has become the preferred, and perhaps only, way for low-income households to save. There should be better ways to save than giving Treasury money, interest free, for a year and then getting a refund.
China trade deadline extended. President Trump set a March1 deadline for a broad trade agreement with China, but has decided to delay his threatened increase on tariffs on Chinese goods from 10 percent to 25 percent because he’s pleased with progress so far. He wants to allow negotiators more time to reach a comprehensive trade deal. Few think China will fundamentally change its policies on intellectual property and support of its domestic (and often state-owned) industries
North Carolina judge voids a constitutional amendment to cap the state income tax rate. Judge G. Bryan Collins ruled the state General Assembly is so gerrymandered that its members don’t truly represent state voters. As a result, the Assembly was not empowered to propose constitutional amendments,including one limiting the income tax. When the legislature voted to put the amendment on the 2018 ballot, many “yes” votes came from members whose districts were ruled unconstitutional because they diluted the political power of African-American voters.
Illinois Governor JB Pritzker wants a tax on plastic bags. Do shoppers? The governor included in his proposed budget a 5-cent-per-bag tax on all plastic bags used at checkout. His twin goals: reducing plastic waste and raising revenue. The tax could generate between $19 million and $23 million annually, depending on whether Chicago is included. Chicago has had its own 7-cent-per bag tax since 2017.
India cuts a tax on new home sales just in time for the general election. The world’s largest democracy announced yesterday a cut in its goods and services tax on sales of residential properties. It will cut the rate from 12 percent to 5 percent on most new housing projects and cut the tax rate on affordable housing from 8 percent to 1 percent. The government hopes to stimulate the economy… and voters.
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