AEI’s Mathur: Let the dust settle before judging the TCJA’s corporate tax cuts. The American Enterprise Institute’s Aparna Mathur writes in TaxVox that there are too many confounding factors to judge the effectiveness of the Tax Cuts and Jobs Act’s corporate rate cuts. Not only does the TCJA suffer from political and legal uncertainties, it also may be affected by changes in the domestic and global economies, as well as tariff wars and deficit growth. “Let’s be patient and let the dust settle,” Mathur concludes “It could be a few years before the results from the TCJA roll in.” Her blog responded to one by TPC’s Steve Rosenthal, who doubts the rate cuts will benefit the economy.
Biden proposes new housing tax credits. Democratic presidential hopeful Joe Biden proposed a $640 billion, 10-year plan to boost affordable housing. It includes a $15,000 refundable, advance-able tax credit for first-time homebuyers, as well as a renters’ tax credit.
About that three-Martini lunch. The IRS issued regulations last Friday aimed at clarifying the always vague rules around deductibility of business meals. The TCJA repealed the deduction for business-related entertainment, but retained the 50 percent meals deduction. The rules generally follow guidance the agency issued in October, 2018.
IRS names a temporary head of its efforts to investigate tax shelter promoters. The Internal Revenue Service named Brendan O'Dell as interim promoter investigations coordinator. Currently a senior advisor in the IRS Large Business & International Division, he will coordinate promoter investigations across the agency. The IRS said it is beginning a national search for a candidate to fill the position permanently.
New Jersey Senate President Steve Sweeney has a plan to fund NJ transit. The Democrat would raise taxes on businesses by restoring and making permanent a 2018 surcharge that expired last month. It would raise the rate on businesses with more than $1 million in profits from 10.5 percent to 11.5 percent until 2022, when it would decrease to 10 percent. Senate Democrats say the tax hike would generate up to $300 million a year. Voters would have to amend the state constitution to guarantee the money goes to NJ Transit.
The Arizona House may vote soon on an 18-cent-per gallon gas tax increase. A measure would raise the state’s gasoline tax from 18 cents per gallon to 36 cents and set a flat rate tax for electric and hybrid cars. Revenues would go to road building and repairs. The Arizona Trucking Association supports the tax, but GOP Governor Doug Ducey opposes any new taxes in the current fiscal year.
Confusion reigns over Oregon’s corporate activity tax. The largest tax increase in state history went into effect January 1. But when lawmakers approved it in the spring of 2019, they left many details to the Department of Revenue and future legislatures. The Columbian reports that firms don’t know what the 0.57 percent on most business transactions will mean or how to plan future investments. First payments are due at the end of April.
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