President Trump promotes tax plan with truckers. The president went to Harrisburg, Pennsylvania, to tout what he said would be a "huge" tax cut for the "middle class." Yet much of his focus was on the proposed repeal of the estate tax, saying that it would benefit a trucking company in East Earl, Pa. The first $5.49 million (nearly $11 million for couples) already is exempt from the tax. TPC estimates that only 80 taxable estates in the US this year will be farms and small businesses. David Cay Johnston calculates that perhaps 30 are trucking businesses
Nobody knew tax reform would be so hard. Politico reports that House Republican Chief Deputy Whip Patrick McHenry says that the toughest part of getting a tax bill passed may be eliminating individual tax preferences. "The greater concerns are around the…provisions within the individual code, surprisingly," he told the Financial Services Roundtable. "In order to simplify the individual code you have to make serious decisions." Who knew?
“All we need is a budget resolution.” House Ways & Means Tax Policy Subcommittee Chair Rep. Pete Roskam says a tax bill will be released right after Congress agrees on a budget resolution. The House passed its version last week, but the Senate still needs to act and differences between the bills resolved. The Senate’s GOP majority can afford to lose only two votes and still pass its budget. Politically, failure is not an option. Will there be a miracle on Capitol Hill on Christmas Eve?
Will a bigger tax break for charitable donations be in that bill? Rep. Mark Walker (R-NC) would create a new deduction for tax filers who don’t itemize. Taxpayers who take a standard deduction could deduct contributions up to an amount equal to one-third of the standard deduction. That deduction is currently $12,700 for married couples but would roughly double under the Big Six United Framework.
How could Congress boost capital gains taxes? TPC’s Rob McClelland has a counter-intuitive suggestion: Raising the 15 percent capital gains rate to 20 percent would generate more revenue and be nearly as progressive as boosting the top rate. Why? Because boosting the average rate rather than the marginal rate would create less of an incentive for high-income taxpayers to avoid the tax hike by hanging on to assets.
More on the state and local tax deduction. The Committee for a Responsible Federal Budget argues that it should remain on the table during tax overhaul negotiations. CRFB says the SALT deduction is unjustified, unfair, regressive, and anti-growth. It acknowledges, however, that “there are real transitional issues policymakers must deal with….Phasing out the deduction, or perhaps maintaining a much smaller capped deduction for a number of years, might be sensible.”
How sweet it is. After an intense lobbying campaign by the beverage industry, the Cook County Board of Commissioners voted 15-2 to repeal the penny-per-ounce soda tax it approved just two months ago. It now must find another way to close a $200 million gap.
The IMF weighs in on tax cuts. The International Monetary Fund, in a report released in advance of its annual meeting, warns that “flatter tax rates across income scales and lower rates for the highest earners could exacerbate a troubling trend toward growing inequality in the United States and around the world.”
eBay paid £1.6m in UK corporate taxes last year. It’s a surprising amount given that the auction site’s UK operations had £1 billion ($1.32 billion) in revenues. eBay did not explain why it did not book those revenues in the United Kingdom, saying only that its tax affairs are entirely legal. eBay International owns the UK arm of eBay and eBay’s US parent owns Swiss-based eBay International.
Another IRS scam warning. The IRS warns e-Services users of a new phishing scam that tries to trick tax professionals into “signing” a supposed new user agreement. The email that announces an “important update” aims to steal passwords and data. The IRS is moving to Secure Access authentication and two-factor protections of its e-Services later this month.
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