TPC will welcome Mark Mazur as its new director in February. Mazur brings to TPC 25 years of broad experience. He currently serves as the Assistant Secretary for Tax Policy at the US Department of the Treasury, and has also served at the IRS, the Department of Energy, the Joint Committee on Taxation, the President’s Council of Economic Advisors, and the National Economic Council. Outgoing TPC Director Len Burman will continue at the Urban Institute as an Institute Fellow.
Two tax cuts in 2017? Incoming White House Chief of Staff Reince Priebus told radio host Hugh Hewitt that Congress may enact two tax bills by April. But he ducked when asked about the big infrastructure bill that president-elect Trump has sometimes promoted as a top priority. The two-bill idea has most tax geeks scratching their heads, but presidents and Hill leaders have tried the “second tax bill” gambit for years as a way to get lawmakers to defer items on their wish lists. It almost never works.
Repealing the ACA: Good for the rich, but for the rest… not so much. TPC’s Howard Gleckman explains results from a new TPC analysis. Repeal of the Affordable Care Act would cut taxes for high income households but raise taxes on many others.
How might Senator Marco Rubio help Puerto Rican workers and employers? TPC’s Elaine Maag considers the Florida lawmaker’s effort to raise the after-tax pay of low-wage workers in Puerto Rico. His idea: Reduce the minimum wage but increase a refundable tax credit. Elaine explains that it also tests “an idea Rubio has kicked around before – providing refundable tax credits throughout the year, rather than only when workers file their returns each spring.”
Want to build a better soda tax? A new TPC report shows how a tax per liquid ounce of sweetened beverage is too blunt a policy instrument to reduce sugar consumption. Donald Marron explains why linking a tax to a beverage’s sugar content is a better approach. “[R]easonable people differ over whether [soda] taxes make sense. However, if governments choose to enact them, they should target them as precisely as possible to the harm they are meant to reduce.”
AICPA to Congress: No private debt collection for federal tax debts. As the nation’s lawmakers gear up for tax reform, PoliticoPro reports that the American Institute of Certified Public Accountants wants them to repeal the law (paywall) requiring the IRS to hire private debt collectors. The accounting advocacy group says the effort is ineffective and costly and creates unnecessary anxiety and confusion among taxpayers.
International tax reform language is like Greek to too many. TPC’s Eric Toder offers a translation of three key labels: (1) destination-based tax; (2) territorial tax; and (3) worldwide tax. Understanding them is important, says Toder: “These labels can be confusing and are often misapplied. But the differences among these systems can be politically and economically significant.”
Indonesia says Google needs to pay more in taxes. The nation rejected Google’s settlement offer after alleging the company reduced Indonesian taxes by booking local income in Singapore. The main investigator of the case says Indonesia wants “Google to open its books and the tax office will calculate the tax owed.” Google declined to respond, saying only that it has paid necessary taxes and will cooperate with the Indonesian government.
China decided to raise its sales tax on small cars. China reduced its 10 percent levy to 5 percent in October 2015. The cut was set to expire at the end of this year but the auto industry pushed for an extension. The compromise: The rate will climb to 7.5 percent in January. The nation’s auto industry has been expanding for 26 years.
Congress is recess. The Daily Deduction will post Mondays until Congress returns. Happy Holidays!
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