If you’re going to play the game, make sure you know the rules. TPC’s Howard Gleckman considers the stability of our voluntary tax system. President Trump responded to The New York Times report on his substantial income losses by tweeting, “You always wanted to show losses for tax purposes.... it was sport.” The thing is, when it comes to paying our taxes, Americans may not all be playing the game by the same rules.
Heading straight to court. House Ways & Means Committee chair Richard Neal will decide on Thursday whether to go directly to court to try to get Trump’s tax returns. Treasury Secretary Steven Mnuchin refused this week to produce the returns. Neal’s choices: Issue a subpoena or go directly to court.
If you want something done right, eventually, do it yourself? The Wall Street Journal looks at presidential candidate Bernie Sanders’s tax returns from 2009 (paywall). It found four mistakes in that year’s hand written document that resulted in Sanders underpaying his taxes by $4,479. He corrected his underpayment error quickly, though. Said Illinois accountant Glen Birnbaum, “You need software at some point with the multiple calculations. It’s not easy to do it by hand.”
What’s the return on steel tariffs? Using US Department of Labor data, the Peterson Institute for International Economics estimates that US consumers and businesses pay over $900,000 a year for every job saved or created by President Trump’s tariffs on steel. The cost would rise if Trump follows through on his threat to add 25 percent tariffs on over $40 billion worth of items purchased directly by consumers, like furniture, handbags, clothing, and firearms.
Will Illinois tax pot’s potency? Democratic Governor JB Pritzker’s budget would legalize recreational marijuana for adults age 21 and over and impose a “cultivation privilege tax” of 7 percent on gross receipts from cannabis sales. Consumers also would pay a tax of 10 to 25 percent based on a product’s level of THC. Pot with a THC level at or below 35 percent would be taxed at 10 percent of the purchase price, pot with a THC level exceeding 35 percent would face a 25 percent tax. All cannabis-infused products would face a 20 percent tax on the purchased price.
Free college in Washington State, thanks to a new business tax. Lawmakers have moved closer to providing free or reduced college tuition to low- and middle-income students who attend community colleges or public institutions. They’d impose a gross receipts tax on companies that employ highly skilled workers in fields such as accounting, engineering, architecture, and consulting to help fund the program that would cost $1 billion over four years. The largest tech companies would pay up to $7 million a year. Microsoft and Amazon have endorsed the measure, called the Workforce Education Investment Act. Democratic Governor Jay Inslee could sign the bill as early as next week.
New Jersey Senate President says “no” to a millionaire’s tax: It’s too SALTy. Democratic Governor Phil Murphy would set a 10.75 percent top income tax rate on filers earning more than $1 million and use $250 million of the revenue for property tax relief. But Senate President Stephen Sweeney, also a Democrat, says the tax no longer makes sense, given the federal $10,000 cap on state and local tax deductions. He’d fund property-tax relief by cutting pensions and health-care costs for state workers.
Texas Hold ‘Em? The Texas House has decided to delay voting on a “sales tax swap” until 2021. The proposal would raise the state sales tax by 1 penny while reducing school district taxes. House Republicans tabled the vote after the Senate stripped the provision from its school finance bill. School district tax cuts may not be dead, however. Lawmakers are looking for another way to fund them.
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