Did the Tax Cuts and Jobs Act of 2017 pay for itself in 2018? Several prominent conservatives have repeatedly claimed that the TCJA either increased revenues or will pay for itself. But TPC’s Bill Gale and the Brookings Institution’s Aaron Krupkin show how the TCJA did neither.
Speaking of predictions….TPC’s Howard Gleckman compares the Trump Administration’s economic growth forecasts to CBO’s, and finds quite a gap—almost a full percentage point of growth in most years. “Rosy White House economic scenarios hardly are new,“ Gleckman says, “But the gap between this one and more mainstream forecasts is uncommonly wide.
TCJA tax cuts? What tax cuts? A new Politico/Morning Consult Poll finds that half the respondents never noticed an increase in take-home pay after passage of the TCJA . About one-quarter said they had, and another quarter didn't know or had no opinion. The same poll found that despite the Washington folderol in recent weeks, most respondents said their refunds won’t affect their vote in 2020. About 13 percent said they made them more likely to vote for Trump and 13 percent said they made them less likely to support the president.
Democrats try again to close the carried-interest loophole. Sen. Tammy Baldwin and Rep. Bill Pascrell reintroduced a bill to tax carried interest income at the ordinary income tax rate instead of the lower capital gains rate. The top rate on income is 37 percent, while the top rate on capital gains is 23.8 percent. The Joint Committee on Taxation estimates that taxing carried interest as if it were ordinary income would raise $14 billion over 10 years.
Another tax season, another reminder about unclaimed refunds. The IRS says it is sitting on refunds of $1.4 billion that belong to more than one million people who have not yet filed federal income tax returns for 2015. To avoid leaving money on the table, most of them must file their 2015 returns by April 15. Taxpayers in Maine and Massachusetts have until April 17.
A costly swap. Lawmakers in Kentucky want to replace the state’s "bank franchise tax” with the corporate income tax. Kentucky-based banks would pay about $105 million less in tax annually. The proposal is part of a bigger bill that also shifts to taxpayers as much as $1 billion in future pension costs of local health departments, regional universities and others.
Rural hospitals in Texas could suffer from property tax reform. Bills in the Texas legislature that would slow the growth of property taxes could hurt rural hospitals which have taxing authority. Today, municipalities and special taxing districts can raise taxes by up to 2.5 percent. The House bill would exempt most rural hospitals from the tax cap but the Senate version would allow voters in small districts to decide whether to exempt them.
Illinois Governor JB Pritzker unveils an income tax calculator. Specifically, the online tool called a “Fair Tax Calculator” illustrates how a new graduated income tax might impact Illinois taxpayers. Under his plan, tax rates would start at 4.75 percent for earnings up to $10,000 and rise to 7.95 percent on $1 million or more.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.