Unclear. The President spoke to a joint session of Congress last night. He seemed to give tacit approval to some form of tax on imports, while promising a much lower but unspecified corporate tax rate and "massive" tax relief for an undefined middle class. Details, as ever, to come.
The President’s child care proposals would mostly help high-income families. In their new paper, Lily Batchelder, Elaine Maag, Chye-Ching Huang, and Emily Horton find that about 70 percent of benefits would go to families with income of at least $100,000 and 25 percent to families with at least $200,000. Very few benefits go to the lowest income families. Trump would offer an expanded tax credit for low-income families, a tax deduction for higher income families, and expanded, tax-advantaged child care savings accounts. Families with the lowest incomes are likely to struggle most with paying for child care.
There are key differences between today’s CIT and the DBCFT—aside from letters. TPC’s Eric Toder has a new brief explaining how the corporate income tax and the House GOP’s proposed destination-based cash flow tax work. The main differences: 1) Under the DBCFT, firms could immediately deduct capital expenses instead of deducting them over the life of the asset, 2) They could no longer deduct interest expenses, 3) They could exempt exports from tax, and 4) They could no longer deduct import purchases.
Georgia Governor Nathan Deal says, “don’t be tempted.” He signed a tax overhaul in 2012 and has seen the state’s reserve fund go from $100 million when he took office in 2011 to over $2 billion. He’ll finish his term next year and can’t run again. He warns the next governor: “There are easy decisions in the short term that turn out to be problems in the long term,” he said. “Businesses, when they are looking for places they want to go, they want to go to a state that’s demonstrated it has its own fiscal house in order.”
What will Montana do about taxes? Democratic Governor Steve Bullock proposed $280 million in new taxes or tax increases last fall in response to declining state revenues from oil and gas extraction. Montana’s Republican-led legislature hasn’t responded with much enthusiasm. It has until March 30 to move revenue bills through chamber.
Wisconsin tax filers may have to wait three months to receive refunds. Fraud prevention efforts will delay the disbursement of at least 60,000 income tax refunds for up to 12 weeks. Wisconsin’s revenue department relies on Colorado-based private contractor, FAST Enterprises, to flag tax returns as suspicious. Last year, the state blocked $63 million in refunds due to errors or fraud.
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