A hearing for Treasury nominee Steven Mnuchin. He testified before the Senate Finance Committee yesterday, and the conversation was (sort of) revelatory. Mr. Mnuchin worried that IRS workforce reductions—cuts engineered by congressional Republicans—would hurt tax collections. He provided no new specifics about future Trump tax cuts, but said the Administration’s goals would be simplification, middle-class tax reductions, and incentives for US business to stay home. Pressed by lawmakers, he also said he’d eliminate the tax “loopholes” that encouraged his hedge funds to operate out of Anguilla and the Caymans. He also backed a version of the Volcker rule, which prohibits banks from trading with taxpayer-insured deposits, and called his failure to disclose $100,000,000 in assets an “unintentional oversight.”
And, yes, TPC did say Trump’s tax plan would add $7 trillion to the deficit. At the hearing, Mnuchin seemed confused when asked about the estimates. Perhaps they were for an earlier plan, he wondered. Or were they a traditional estimate that ignored macroeconomic effects? Nope and nope. TPC’s Howard Gleckman explains.
State and local tax deductions? Keep ‘em, implores Governor Cuomo. The Democrat met with the President-elect this week to note, among other things, that it would be “devastating on the state of New York… if you didn't allow the people of this state to deduct their state and local taxes.” The House GOP tax plan would eliminate the deduction and Trump has said he’d cap itemized deductions. The state and local income tax deduction disproportionately favors wealthy earners, especially those living in blue states.
Rhode Island will get more sales tax revenue. Online retailer Amazon will begin collecting sales and use tax starting February 1. The state estimates that it’s losing $25 million to $30 million in uncollected online sales tax. Amazon collections will close only some of that gap since online shoppers visit lots of retail sites. Amazon is now collecting in roughly half the states.
When one Chicago property tax rebate door closes, another spending plan opens. The program had a $20 million budget, but at last count in November, taxpayers received only $1.2 million. Now, Mayor Rahm Emanuel would like to spend $1 million of whatever remains on a cybersecurity job training program, but over a dozen aldermen have their own spending ideas.
One jurisdiction’s tax hike may be another’s housing boom. Hong Kong has increased its stamp duty, or property tax, to 30 percent for overseas buyers. Foreign investors are setting their sights on Singapore now: The rate there is 18 percent.
Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, write us at dailydeduction “at” taxpolicycenter “dot” org.
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.