President Trump lashes out at Canada (again). In a wide-ranging address to the National Federation of Independent Businesses yesterday, President Trump again said he wants separate deals with Mexico and Canada instead of sticking with the three-nation North American Free Trade Agreement. He also complained about Canadians’ shopping habits. He explained that Canadians shop in the US, but “buy shoes and they wear them. They scuff them up to make them sound old, or look old," and then they wear them back in to Canada to avoid Canada’s high tariffs. Maybe it really is all about the shoes.
Senate panel approves $77 million in additional IRS funding. A Senate Appropriations subcommittee approved a $23.7 billion financial services spending bill yesterday that provides the IRS with a bit of additional money to implement the Tax Cuts and Jobs Act. The IRS had requested $397 million earlier in 2018, largely for technology and hardware. Congress passed an omnibus spending bill in March that gave the agency $320 million of its request. The full Appropriations panel will vote on the bill later this week.
TCJA popularity continues to sag. A Monmouth University survey finds only 34 percent approval of the TCJA, while 41 percent disapprove. Approval is down 6 percentage points from late April and the share of those with no opinion is up from 16 percent to 24 percent. In January, 44 percent approved and 44 percent disapproved of the tax cut.
House Republicans prepare a “message” budget for 2019. They claim the resolution would lead to a balanced budget by 2027. It would increase defense spending but cut overall spending by $8 trillion, repeal the Affordable Care Act, and open the door to a new round of “fast track” tax cuts. The House Budget Committee may vote on the budget proposal tomorrow, and the full House may consider it next week, though passage remains uncertain. The bill would have little support in the Senate, but is aimed at giving endangered House Republicans a small-government budget to run on.
Voters in a Texas school district reject a property tax increase; mass layoffs may follow. Voters in Houston’s Klein Independent School District rejected a property tax increase that would have amounted to $13.13 a month on a home valued at $200,000. The rate hike would have generated an additional $28.8 million for the school district that must now cut $22.2 million from its budget. Because 91 percent of the district’s budget goes to payroll and benefits for employees, it may cut 525 positions, or 8 percent of the school district’s staff. Klein is one of the ten largest school districts in Houston, and is home to 51,000 students across 87.5 square miles.
China will cut tax rates to stimulate consumer spending. Retail sales in May slowed to their lowest level in 15 years in China while personal income tax payments are 20.6 percent higher in 2018 than in the same time period last year. In response, the government will raise taxpayers’ monthly allowance by 40 percent to around $775 and make mortgage interest, education expenses, and medical costs tax deductible.
What does the TCJA have to do with caribou? Popular Science looks at how the federal tax law might contribute to disruption of America’s most pristine wildlife refuge. The US may sell 2,000 acres of the Arctic National Wildlife Reserve (ANWR) by next summer because the TCJA nullifies a ban on drilling in one section of the reserve. ANWR is home to one of the few caribou herds left in the world, and the largest in North America.
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