A deal on the “top line budget numbers.” Maybe. Treasury Secretary Steven Mnuchin says the Trump Administration and House Speaker Nancy Pelosi have agreed on overall spending levels for defense and domestic programs and a two-year debt limit increase. But they still need to agree on offsetting spending cuts or revenue increases. And some at the White House, such as chief of staff Mick Mulvaney still may resist the deal. Pelosi wants an agreement today so the House can vote before it leaves for its summer recess next week.
G7 Finance chiefs promise a digital tax plan by January. The Wall Street Journal reports (paywall) that the new tax will be based on a digital, not just physical, presence, and, in an apparent nod to US concerns, will not specifically target big tech companies.
Treasury’s refusal to comply with Ways & Means tax return request: An “unprecedented process.” Treasury has responded to Senate Finance Committee top Democrat Ron Wyden’s investigation into political interference with the House Ways & Means Committee’s request for President Trump’s tax returns. Treasury says it used an unusual process because the request was unprecedented. Wyden has a different interpretation: “Taken together, [Treasury’s responses confirm] that the Treasury Department has diverged from standard procedures in this case. From where I sit, the goal is to protect the president.”
On the Hill next week, more on the Trump returns. Wyden has agreed to allow nomination hearings to be held next week for three Treasury political appointees, Brett McIntosh, Brian Callahan and Brian McGuire. He plans to ask them about any involvement in “this and other troubling episodes.”
And a hearing on Social Security. Ways & Means will hold a hearing on the Social Security 2100 Act. The measure would increase benefits, but also increase the cap on taxable wages and boost the contribution rate. The Penn Wharton Budget Model projects that the measure would nearly eliminate Social Security’s long-run imbalance and reduce the program’s dynamic short-range imbalance. It also projects that relative to current policy, the bill would have little impact on the economy within 10 years; it would decrease gross domestic product by 0.7 percent by 2029, and decrease GDP by 2 percent by 2049.
Mind the gap! The stubborn tax gap, that is. TPC’s Robert Weinberger discusses the country’s difference between taxes due and taxes paid voluntarily and on time. The gap is roughly $458 billion based on tax years 2008-2010. He offers five observations on what the tax gap means and how policymakers can shrink it.
Tax Expenditures: Which are the largest? TPC’s Frank Sammartino and Eric Toder describe the largest tax expenditures in the individual income tax. And they identify the 10 biggest business tax expenditures. They briefly describe each provision and summarize the rationale and effects of each.
Senate Democrats will try to overturn the IRS SALT workaround rule. Senate Minority Leader Chuck Schumer and several other Democrats filed a Congressional Review Act (CRA) resolution of disapproval of the IRS rule that prevents states from giving taxpayers a way to avoid the Tax Cuts and Jobs Act’s $10,000 cap on state and local tax deductions. The resolution would allow Congress to quickly review any new federal regulation as long as it is filed within 60 legislative days of being finalized. Thing is, the CRA requires a majority of the GOP-led Senate to pass. And that won’t happen. Three states, meanwhile, sued Treasury and IRS to get the rule reversed.
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