House Majority Leader Kevin McCarthy won’t back Trump’s tariff. The President-elect wants to levy a 35 percent tax on companies that move out of the country and try to sell their goods in the US. But McCarthy said, “I don’t want to get into some kind of trade war.” He thinks a better way would be tax reform that “encourages companies” to stay in the US.
Goodbye is too good a word. McCarthy also said the House would finish a temporary funding bill to keep the government running through April. Most agencies would operate on current levels, though the Pentagon would get additional dollars. Congress may also provide some money to help replace Flint’s water system and approve a bipartisan measure to accelerate FDA approval of drugs. Then, it hopes to quit for the year by week’s end.
Would red states or blue states benefit more from Trump’s tax plan? Depends. CNBC explains: The Center on Budget and Policy Priorities found that his proposed tax cuts would be a boon to the above-average number of high-income households in 15 out of the 20 states that Clinton won. There are lower-than-average numbers of such households in 25 of the 30 states Trump won.
Is there a better way for the income tax code to treat families and work? TPC’s latest report examines the complexities of related income tax provisions and analyzes a comprehensive option that would minimize the number of “losers” and reduce the average tax burdens for all but highest earners. The option, which draws from a number of proposals by President Obama, President-elect Trump, members of Congress, and public policy groups, would cost $100 billion a year.
The United Kingdom moves ahead with a sugar tax. The government drafted legislation for a two-tiered tax on sugar-added soft drinks. There would be an 18-pence-per-liter levy on soft drinks with more than 5 grams of sugar per 100 milliliters, and a 24-pence-per-liter levy on those with more than 8g per 100ml. The United Kingdom joins Belgium, France, Hungary and Mexico, and a few US jurisdictions in its obesity-fighting tax effort. The British tax would go into effect in April 2018. Soda makers could use the time to reduce the sugar in their products and avoid the tax.
Poland wants to keep its progressive retail tax, in spite of the European Union. The EU has ordered that the tax be suspended as it counts as state aid. The Polish government is appealing the ruling. Poland has also accused the European Commission of breaching EU law by suspending the tax, which could raise 1.6 billion złoty in 2017.
The IRS, state agencies and tax professionals say: Be careful out there. They urge taxpayers to take steps to protect themselves online to help in the fight against identity theft. There are simple steps taxpayers can take to help protect themselves from scammers, hackers, and identity thieves. To start, keeping computer software up-to-date and be cautious about giving out personal information. This is the first reminder to taxpayers during “National Tax Security Awareness Week,” which runs through Friday.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.