The Federal Reserve Bank lowers interests rates as growth remains soft. The bank lowered short-term rates to a range of 1.5 percent to 2 percent, down from 1.75 percent to 2 percent. The Fed hinted that its rate cut is likely the last for a while. The US economy grew by 1.9 percent in the third quarter of the year, following a similarly anemic 2 percent in the prior quarter.
Whither Phase One of the US-China trade deal? The Chilean government announced it is cancelling the APEC Summit due to ongoing mass protests. According to the White House, trade representatives from China and the US were supposed to use the session to sign Phase One of the US-China trade deal. White House spokesman Hogan Gidley said, “We look forward to finalizing Phase One of the historic trade deal with China within the same time frame, and when we have an announcement, we’ll let you know.”
Boo? The “death tax” isn’t so scary for states. In time for Halloween, TPC’s Richard Auxier reports on a new study that finds that while a state estate taxes drive away some super-rich people and their tax dollars, it may not reduce revenue. Citing a new report by Enrico Moretti and Dan Wilson and TPC data, he concludes, “Don’t be scared, estate tax states.” Enough billionaires and mere millionaires stay and pay their estate taxes to keep revenues steady. As Richard notes, there is more at play in location decisions than just taxes—even in the afterlife."
Taxing the scholarships of college athletes. Following the lead of California, the NCAA may allow college athletes to get paid for the commercial use of their names and images. Sen. Richard Burr doesn’t seem to like the idea. He wants to treat as taxable income the scholarships of those athletes who benefit from the new rule.
In Lebanon, a VOIP tax may have helped cost the country’s leader his job. Earlier this month the Lebanese government decided to levy a 20 percent tax on the first call made every day through voice-over-internet-protocol used by apps like WhatsApp, Facebook Messenger, and Apple's FaceTime. The goal was to reduce the country’s debt, one of the highest in the world. But the move sparked protests, and the government rescinded the tax within hours. But it was too late. Street demonstrations have continued and Prime Minister Saad Hariri is resigning. President Michel Aoun will consult with the Lebanese parliament to form another government.
Brazil’s House Speaker calls tax reform his top priority. Speaker of the National Congress Rodrigo Maia says “No other reform is more important.” He emphasized the need simplify the country’s tax system without increasing the tax burden, though he noted that “it is time for the major businessmen to give their contribution.” He has yet to release details.
Another warning from the IRS: Dialing for Social Security numbers. The agency warns taxpayers about robocalls that tell taxpayers their Social Security Number is at risk of expiring and invite a call back to confirm the number’s validity. But do not engage: Social Security numbers do not expire and do not need to be reactivated or confirmed.
In Madison, Wisconsin, a new wheel tax. City residents will pay a higher vehicle tax starting on February 1. The additional annual $40 fee will be highest of its kind in the state. Mayor Satya Rhodes-Conway proposed the tax as a way to fund transit upgrades, and estimates it will generate $8 million a year for the city.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.