What would Tax Cut 2.0 cost? The Joint Committee on Taxation released its scores of the three House GOP bills that serve as the sequel to the Tax Cuts and Jobs Act. Together, including interest payments, the measures would add another $630 billion to the federal deficit by 2029. They’d make permanent the TCJA’s individual tax cuts that are due to expire at the end of 2025. The House Ways & Means Committee plans to mark-up the bills tomorrow. GOP leaders want to send them to the House floor before the November elections but are getting pushback from Blue State Republicans over the bill’s extension of the TCJA’s $10,000 cap on the state and local tax deduction. There is no chance the bills would get the 60 votes they need to pass the Senate this year.
Speaking of deficits… The Congressional Budget Office released its monthly budget update. It estimates that the federal budget deficit was $895 billion for the first 11 months of fiscal year 2018. That is $222 billion more than for g the same period last year. Revenues were 1 percent higher but outlays grew by about 7 percent. The CBO expects that the deficit, receipts, and outlays for fiscal year 2018 will be largely consistent with amounts in its adjusted April baseline.
As for revenue service… The General Accounting Office has issued a new report that gives the IRS relatively high marks for its management of the 2018 tax filing season. It finds that while the IRS faced multiple challenges during that period, it met target dates for processing returns and issuing refunds. However, it warns that before the 2019 filing season begins in about four months, the IRS must reprogram its computer systems to process tax returns, revise nearly 500 forms and instructions, hire and train employees, and help taxpayers understand the TCJA’s changes.
To make money, you have to spend money… from more than two sources. In August, voters in East Lansing, Michigan OK’d a 1 percent income tax on residents and a half-percent for non-resident workers. Newly released campaign finance reports show that supporters of the measure raised more than twice what they raised last year, when a similar tax proposal failed. In 2018, only two donors contributed to the “no” campaign, with about 85 percent of the money coming from the Lansing Regional Chamber of Commerce. Nearly 70 contributors gave to the “yes” campaign in 2018.
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