Mnuchin defies Neal’s subpoena. Treasury Secretary Steven Mnuchin said he would not comply with House Ways & Means Chairman Richard Neal’s subpoena for six years of President Trump’s tax returns. Mnuchin insisted there was no legislative purpose for Neal’s request. Neal said “The law, by its terms, does not allow for discretion as to whether to comply with a request for tax returns and return information.” The likely next step: federal court.
President Trump lifts tariffs on industrial metals from Mexico and Canada. In exchange, Mexico and Canada say they will adopt measures to keep Chinese steel from entering the US through their countries. Mexico and Canada refused to agree to shipment quotas or being labeled national security dangers. The administration hopes the agreement will open the door to approval of a broad trade agreement that has been negotiated by all three countries.
President Trump delays auto tariffs on EU and Japanese shipments for six months. Trump threatened last year to impose a 25 percent tariff on foreign cars and parts, citing national security concerns. Now, he’s giving the European Union and Japan six more months to agree to limit their auto shipments to the US before facing such tariffs. The Commerce Department says imports of foreign autos and auto parts threaten US automotive research and development.
Is the White House considering a gas tax increase to fund infrastructure? Bloomberg reported last week that an internal White House memo included a gas tax increase as one option for financing an infrastructure plan. But Politico reports that White House chief of staff Mick Mulvaney and OMB director Russ Vought are telling fiscal conservatives the idea is a non-starter.
Budget talks to begin this week. The bipartisan leadership of the House and Senate plan to meet with Mulvaney and Mnuchin this week to begin budget discussions. Hill leaders want a two-year deal that would raise both domestic and military spending. Trump, so far, has balked.
Switzerland voters approve tax overhaul to keep big business. Voters approved a corporate tax overhaul that will maintain the country’s tax-friendly status for large multinational firms even though it repeals some special tax breaks that violated Organization for Economic Cooperation and Development rules. Without the changes, Switzerland’s corporate tax rate would have climbed from an average of 17.1 percent to as much as 24.16 percent.
Why so many countries have adopted a VAT. Northwestern University professor Seema Jayachandran explains in The New York Times why the value-added tax “has been a powerful, well-mannered weapon for progress. That is especially true in less-affluent nations, because it reduces tax evasion in a relatively effective and gentle way.” Plus, Jayachandran writes, it encourages saving and investment. And while the levy is regressive, it could be paired with a tax credit for low-income people, as argued by TPC’s Bill Gale.
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