Trump’s trade war sees car casualties. Tesla Motors says it will raise prices of its cars in China by about 20 percent due to China’s retaliatory tariffs on US automobiles, imposed in response to President Trump’s tariffs on Chinese steel and aluminum. The company also announced yesterday that it will build a new large factory... in China. Likewise, BMW, which has factories in the US, will be raising prices of its cars in China. And it plans to move production of some of its SUVs from South Carolina to… China.
Fast food, four words, 39 years… The Wall Street Journal delves into the implications of lfour missing words in the Tax Cuts and Jobs Act. The missing phrase: “any qualified improvement property” means that while businesses can immediately write off the cost of buying equipment and the like, they can’t expense interior renovations. Before TCJA enactment, a fast food company or retailer could deduct such costs over 15 years. The TCJA was supposed to make those deductions immediate, but because an editing error dropped those four words, companies must deduct their improvement costs over 39 years. That’s… not immediate.
What would Amazon’s second corporate headquarters mean for cities and states? They are offering huge tax incentives to win over the retail giant – and betting on a big boost in local economic development. But would those tax incentives truly pay off? And what is the cost to the state and local governments that make these deals? TPC’s Megan Randall explains on the Urban Institute’s Critical Value podcast.
Evaluating tax expenditures. These spending-like subsidies embedded in the tax code cost taxpayers roughly as much as domestic discretionary programs. But government evaluators give the tax breaks little to no scrutiny. Even when independent research finds many large tax expenditures are inefficient, the subsidies stay on the books — for decades. TPC offers a brief overview of tax expenditures, urges government to regularly evaluate the subsidies, and reviews tools for doing so.
Speaking of tax expenditures—they’ll be considered by Ways & Means at 2pm. The House Ways & Means Committee will mark up a big package of bills aimed at expanding health savings accounts and creating some new tax breaks. One is the PHIT Act, or the Personal Health Investment Today Act. An older version would have allowed you to deduct the cost of your golf equipment. Golf is now out, as are riding, sailing, and hunting. Never fear, tennis and skiing are still OK. The panel also will consider another delay in the Affordable Care Act’s “Cadillac Tax” on generous employer sponsored health insurance.
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