What will next year’s tax agenda look like? Tune in this morning at 9:30 to find out. That’s when a Tax Policy Center program may help answer the question. TPC director Mark Mazur will set the stage. He’ll be followed by a panel with former top Senate Democratic tax aide Cathy Koch, long-time Senate GOP Finance Committee tax counsel Mark Prater, former Deputy Assistant Treasury Secretary for Legislative Affairs Sandra Salstrom, and former Treasury Tax Legislative Counsel Tom West. TPC’s Howard Gleckman will moderate. Former senator John Breaux will wrap up. Watch the live webcast here.
When all is said and done this year — are tax extenders all that’s left? House Ways & Means Chairman Kevin Brady wanted to eliminate many expired tax breaks and make permanent other temporary provisions following the enactment of the Tax Cuts and Jobs Act. But this week he rolled the extenders into a much bigger bill that includes IRS administrative changes and retirement savings incentives. Now the package, which CBO estimates will add at least $54 billion to the deficit over the next decade, has run into a brick wall among Senate Democrats. Bloomberg reports that those extenders may be the only tax issue the House and Senate will agree on in the final weeks of this congressional session. Others think even that may be optimistic.
What about a federal gas tax hike? Politico reports that Senate Commerce Committee Chair Roger Wicker would consider raising the federal gas tax if President Donald Trump endorses the idea. Lawmakers of both parties would love to pass an infrastructure bill next year but are at an impasse over how to pay for it.
The EU digital tax may be dead—for now. The death knell may have been delivered by Ireland, Sweden, Denmark, and Finland that rejected a temporary 3 percent levy on mostly US- based tech companies. The result: EU member states may go their own ways on digital taxes.
The President toys with tariffs, again. In a series of tweets yesterday, President Trump said his administration is studying the potential use of new tariffs on auto imports. He suggested that had auto tariffs been in place, GM would not be closing plants in the US. German media reported this week that Trump is considering a 25 percent tariff on car imports from all countries aside from Mexico and Canada.
With GM closures, Lordstown, Ohio faces tax revenue loss. The local General Motors plant once funded 40 percent of the town’s budget. That fell to 20 percent in 2017 after GM eliminated its third shift at the plant, reducing tax revenue by $1.5 million. Should the plant close as scheduled March 1, the village could lose another $1 million. Lordstown’s mayor says residents won’t see services cut until 2020.
How will Arkansas Governor Asa Hutchinson’s income tax proposal affect his state’s budget? The governor wants to reduce the top individual income tax rate from 6.9 percent to 5.9 percent and make other changes. That would cost the state about $190 million in tax revenue from fiscal years 2020-2024. Lawmakers will consider the proposal in their next legislative session beginning January 14.
Giving Green? Outdoor clothing retailer Patagonia has committed $10 million of its TCJA-related tax savings to nonprofit groups that focus on climate and conservation issues. Said company CEO Rose Marcario, “Taxes protect the most vulnerable in our society, our public lands and other life-giving resources.” The corporate tax cut, she said, weakens that protection.
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 email@example.com. 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.