Will 2017 be the year of tax reform? House Ways & Means Chairman Kevin Brady seems convinced. He says he’s optimistic about the new president and what the new year will bring. “The president-elect as president can play a key role from the bully pulpit in rallying the American public to get behind tax reform.” Brady has also had “very positive discussions” about tax reform with his Senate Finance Committee Chairman Orrin Hatch, and looks forward to hearing about Democrats’ ideas.
It may also have to be the year of the tax extenders. Three dozen of the perennial expiring provisions will have to wait until next year, if they are going to be renewed at all. They were left out of the stopgap spending bill Congress will consider this week—just before it quits for the year. The fate of the extenders, including several related to alternative energy sources, will be highly uncertain as Congress likely tackles a big tax bill in 2017.
A delay in the name of protection could actually hurt. A new TPC report explains how the Protecting Americans from Tax Hikes Act of 2015 requires the IRS to delay tax refunds until at least February 15 for taxpayers who claim an earned income tax credit or additional child tax credit.. While the delay will give the IRS extra time to check the claims for accuracy, it will mostly affect low-income families with children who rely on refunds to pay down debt or spend on necessities. For them, delayed refunds will likely mean additional financial hardship.
Considering the tradeoff between more debt and a big tax cut. It is a good bet that Congress will cut taxes next year. We don’t how big the tax cut will be, but without any offsetting spending cuts, it could be a giant tax cut that the US can’t readily afford. Would it be worth it? Economists and tax policy experts debate this issue all the time, but the Tax Hound finds out what some average taxpayers think.
The IRS says phishing scams grew by 400 percent last filing season. And it warned taxpayers to be alert to these and other malware attacks during the coming filing season.
Will China extend its tax cut to small engine cars? The nation will likely wait until the last possible moment to announce its decision. If the tax cut expires as scheduled at the end of the year, China’s auto industry association warns of a drop in sales growth in 2017. Automakers in the US, like Ford Motors, are making contingency plans.
Does London’s financial district need a corporate tax cut? Perhaps not. The financial services industry paid $91 billion in tax during the most recent fiscal year, the most since before the financial crisis. But the share of corporation tax has fallen while the share of payroll tax has grown.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.